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USD: Scope For More Pain Trade For USD Shorts N-Term On Position Clearout – BNPP

The US Dollar was on a roll alongside Treasury yields. But can this continue? Here are some doubts:

Here is their view, courtesy of eFXdata:

BNP Paribas Research discusses the USD outlook and  sees a scope for further USD gains in the near-term,  while maintaining a structural bearish bias in the medium term.

We see an elevated risk of a position clearout and unwind of short USD hedges, which could see the USD regain ground for a period of time.

The problem for USD shorts is that elevated US short-term rates make it expensive to maintain this position, particularly versus a negative yield currency like the EUR,” BNPP argues.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.