What is the outlook for the US dollar in H1 and H2?
Here is their view, courtesy of eFXdata:
Bank of America Global Research discusses the USD outlook and looks to buy a USD dip in the first half of the year.
“We expect that the macro policy mix of very loose fiscal and monetary policies in the US, which keeps the USD weak in the short term, combined with relatively fast vaccination, particularly compared with the Eurozone, will soon lead to a much stronger US recovery. Indeed, we expect a twice as fast recovery in the US this year, by 6%, as in the Eurozone, 2.9%. We find it hard to believe that the USD will remain weak in this case, even if the Fed remains on hold in the meantime. And we also find it hard to believe that the Fed will remain on hold in such a scenario,” BofA notes.
“Bottom line, we would buy the h1 USD dip, to position for an h2 USD rally, particularly against the EUR,” BofA adds.
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