What is the outlook for the US dollar into year-end?
Here is their view, courtesy of eFXdata:
Nordea Research flags a scope for USD gains into year-end on the back of tightening USD liquidity impulse.
“Since Mnuchin and the US Treasury prefunded a huge fiscal deal that is likely not going to materialize on this side of the election, the USD liquidity impulse has taken a beating due to Treasury prefunding/cash hoarding ahead of the fiscal deal,” Nordea notes.
“The USD usually regains its footing after a while when the USD liquidity impulse tightens, alongside weaker risk appetite and flatter yield curves. This could be the case over the next 1-2 months before a (much) better 2021 with continued wide scaled QE alongside a fiscal deal that will allow the US Treasury cash account to drop in size,” Nordea 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
