A client note via Citi with remarks on the US dollar ahead
Citi's bias is for the USD to gain further in the weeks and months ahead
- More USD buyers if the risk backdrop remains "challenged"
A move back lower for the USD prior to the US election is a risk if:
- an imminent, widely distributed COVID-19 vaccine
- and/or the Fed asserting its dovishness again (eg by increasing asset purchases &/or giving more aggressive guidance)
With an eye on developments apart for this Citi say that improved economic data of further easing from central banks elsewhere is unlikely to prompt flows back into pro-risk trades
Citi says its added a short NZD/USD trade, remains short USD/JPY.
