The US political season kicks off in Iowa and candidates offer different visions of the future. How can this impact the dollar?
Here is their view, courtesy of eFXdata:
Credit Agricole Research discusses the USD outlook and flags a scope for further gains in the near-term.
“The USD should continue to benefit from its status as a high-yielding safe-haven currency. That said, we expect that the continuation of the Fed’s balance sheet expansion and liquidity provision programs should keep the currency’s rate advantage close to recent lows,” CACIB notes.
“Moreover, investors should continue to play closer attention to the upcoming Democratic caucus in Iowa on February 3 and the New Hampshire primary on February 11. It is worth highlighting, that, whereas the mainstream candidate Joe Biden is leading in the polls ahead of the former, the left-wing anti-establishment candidate Bernie Sanders is in the lead ahead of the latter.
“We suspect that a confirmation of the polls and/or evidence that the popular support for anti-establishment candidates is growing could put the USD on the back foot against other liquid currencies like JPY and even EUR,” CACIB adds.
For lots more FX trades from major banks, sign up to eFXplus
By signing up for eFXplus via the link above, you are directly supporting Forex Crunch.
Share
