The US dollar has lost significant ground in response to the Fed’s dovish intentions. What’s next?
Here is their view, courtesy of eFXdata:
Citi Research discusses the USD outlook in light of yesterday’s Fed Speak by Fed Bullard and Fed Powell.
“The medium to longer term bear case for USD remains despite pushback from Fed-speak overnight for a 50bp July rate cut. Weakening US data coupled with Fed rate cut expectations (for 50bp this year if not in July) and a US White House determined to see a weaker USD as a “correction to its historical overvaluation” all point to a more structural decline in USD later this year,” Citi argues.
“More near term, the CitiFX Quant team sees USD selling due to month-end FX hedge rebalancing,’ Citi adds.
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