The firm says any further rebound in the dollar would provide a good opportunity to engage into fresh shorts against the currency
The firm's senior FX strategist, Sean Callow, says that the dollar rally this week has been driven by evidence that the US economy is rebounding quicker in Q3 and that goes in contrast with softer Eurozone data and the ECB's discomfort over a stronger euro.
But any further gains in the dollar from this point would present an opportunity to build on short positions against the greenback, as Callow says that:
"There is still room for the dollar to decline further on waning yield support but also likely risk premium on the dollar on election uncertainty, including potential 2000-style lack of quick result."
This continues to add to the growing chorus of calls for a weaker dollar in the bigger picture, as what we have been seeing throughout the past two weeks here.
