As we approach the end of 2020, what is the outlook for the US dollar?
Here is their view, courtesy of eFXdata:
Bank of America Global Research maintains a bullish USD bias into year-end.
“The BBDXY has been up 9 out of the last 10 years for an average gain of 1.4% over the next 20 trading days. In all 10 years, EURUSD was down and USDJPY & USDCHF were up over this horizon. USD appreciation on these pairs has averaged roughly 2%,” BofA notes.
“Bullish US10YY seasonals could be part of it, thus potentially not holding this time around if global risk aversion rises. But if risk does trade lower (counter to seasonals), USD should be supported as its correlation to risk aversion remains heavily positive,” BofA adds.
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