Further upside could see DXY approach to 100.00 – UOB
Researchers at UOB Group suggested the Greenback is seen edging higher ahead of a move to the 95.80 regions in H2 2020.
“In the currency space, we note that the US Dollar remains stubbornly strong and this appears to be at increasing odds to deteriorating yield spreads amidst further easing from the US Federal Reserve”.
“Indeed, in the FX Majors, we now expect the gradual tapering off of USD strength against the EUR and AUD. Back in 2015, it is worth noting that the EUR had weakened ahead of the ECB’s QE program. As for Australia, the aggressive twin rate cuts by the RBA appear to have fired up Australia’s exports and current accounts”.
“After near term uncertainties pass, we can expect EUR/USD to head back up from 1.10 to 1.14 and AUD/USD to climb from 0.68 to 0.71. Overall, we can expect the US Dollar Index (DXY) to peek under 100 and turn back down to 95.8 by 3Q20”.