Nomura remain bullish on the US dollar but are pndoering what could turn it lower.
Analysts outline six alternatives:
- if Fed rate cuts successfully increase US economic growth, could lift world outlook & reduce haven USD demand
- A trade deal between the U.S. and China would lead to broad weakness in the USD, and risk-on in most assets
- Global coordinated expansion of fiscal stimulus could help to boost the global economy and create risk-on
- Recent ECB monetary stimulus, if it's more effective than expected, euro could strengthen against the USD
- USD also vulnerable if productivity picks up
- Or if Brexit has a positive outcome
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Nomura caveat that it's too early to say when or if these developments will happen
via Bloomberg