USD: Is USD A Buy?
USD has been under pressure, mainly on the back of rising uncertainty regarding President Trump’s ability to deliver on his economic agenda. In that regard, We argue that even if such uncertainty should persist, the recent USD downside is corrective rather than a change in trend. This is especially true as further improving fundamentals may ultimately lead to investors’ central bank rate expectations rising, as these remain out of line with Fed projections. This suggests too that more supported central bank rate expectations should limit currency downside from the current levels, In line with this view. We favor buying USD on dips, especially against the EUR and JPY.