The US dollar is awaiting the NFP. But will it indeed move afterward? In general, what’s next for the greenback?
Here is their view, courtesy of eFXnews:
USD: Attractive To Use Periods Of Elevated Doubt To Add Long Exposure – BNPP
BNP Paribas FX Strategy Research continues to favor adding to USD longs on weakness.
BNPP notes that current downside risks for the strong-dollar consensus have already been factored in their USD outlook including US fiscal policy implementation risk, which BNPP anticipated could generate periodic and violent reversals for the USD.
“With the underlying drivers of USD strength still in play, we think it is attractive to use periods of elevated doubt and reduced positioning to add exposure,” BNPP advises.
USD: What The Fed’s Balance Sheet Reduction Would Mean For USD? – SocGen
Societe Generale FX Strategy Research notes that the focus of FOMC Minutes was on when and how to start the process of reducing the Fed’s balance sheet.
This, according to SocGen, matters for the USD for two reasons: “Firstly, what matters for the dollar now that the rate-hiking cycle is underway is not how many hikes we get this year (or next) but where the Fed’s going in the longer run. And secondly, it’s important for the path of longer-dated Treasury yields. The dollar gets not help from the Fed if we’re collectively tempted to revise terminal Funds down rather than up,” SocGen argues.
As such, SocGen argues that with 10s still flirting with the bottom of their 4-month range, the danger of a break lower’s clear in USD.
USD: Bull Run May Be Turning; EUR/USD En-Route To 1.12 – BTMU
BTMU FX Strategy Research argues that the turning point for USD Bulls may have arrived a little earlier than what originally expected and has changed its forecast for USD predicting a period of dollar depreciation ahead.
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