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USD: Why We Stick With The USD Through Q3 – TD

What is the forecast for the U.S. dollar through Q3 and Q4 and 2020?

Here is their view, courtesy of eFXdata:

TD Research  maintains a structural bullish USD bias through Q3.

Our forecasts have called for a weaker USD into Q4, with EUR finally marking a break to the topside. That reflects the risks around the US elections, prospects that the world could start to see green shoots for global growth on the horizon, and the fact that the USD might begin to care about US-style MMT. Any progress on this broad European proposal would cement that view while the proposal does reduce the tail risks of an EZ breakup,” TD notes.

“However, we don’t think these themes will resonate with the market just yet, and we believe the USD makes another leg higher, especially against European currencies like EUR and GBP this quarter. The other wildcard rests on US/China trade relations, which seem to have gotten worse. While the tone will likely continue to get worse into the election, we don’t expect them to scrap the trade deal or that the US imposes sanctions,” TD adds.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.