USD: Here Is Why The Decline In The Treasury General Account Is Bearish For USD – Citi

What is the forecast for USD in the medium-term?

Here is their view, courtesy of eFXdata:

Citi maintains a bearish bias on the USD in the medium-term.

“The US Treasury General Account is likely to decline by > $700bn over the next three months, supporting risk assets. The decline in the TGA balance is also likely to weigh on the USD through two channels: portfolio balance effects and further tightening of FX basis,” Citi notes.

“We remain bearish USD, linked to a global recovery and very low US real yields alongside an extra  push from the TGA, and despite expectations of US growth outperformance,” Citi adds.

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