The US dollar continues to struggle against most of the G-10 currencies. What is the bias for 2021?
Here is their view, courtesy of eFXdata:
NAB Research maintains a structural bearish USD bias for next year.
“Beyond the near-term influences of risk sentiment on USD volatility in the remaining 21 days before the election, including, we’d suggest, the potential for a return of worry warts associated with risk of a contested election and bearing in mind the S&P fell 8% in the three weeks following the 2000 election, we remain convicted in the view the USD will fall next year irrespective of the election outcome,” NAB notes.
“From its still significantly overvalued start-point, the real US yield argument for USD weakness remains persuasive. Even if Treasury yields are apt to rise on the back of sharply increased bond supply under a Biden Presidency’s fiscal policy plans, inflation exactions might similarly rise under a stronger US growth scenario, to leave real yields not much different from where they are today, with a still long way to play out on the USD,” NAB adds.
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