US dollar on the defensive again
![US dollar on the defensive again](http://az705044.vo.msecnd.net/20200318/bailout-facemask-dollar.png)
The US dollar is sinking again.
The rundown of reasons to sell the dollar is this:
- US election/political risk
- Improving Republican polls increase risk of divided, deadlocked
- The lack of further stimulus could tee-up US economic underperformance
- Relative valuations are better outside the US (i.e. equity p/e ratios)
- Money is flowing out of USD safe-haven trades
- Debt monetization fears
At the moment, the euro and the pound are leading the way with the commodity currencies not far behind. It's a genuine dollar rout though and at some story the momentum simply takes over.
EUR/USD still faces a big level at 1.20 but it certainly looks like it can run. The major risk I continue to see is that equity markets begin to kick-and-scream about the lack of stimulus.
![EURUSD](http://az705044.vo.msecnd.net/20200818/eurusd-daily-chart-aug-18.png)