CitiBank: US Dollar to depreciate 3%-4% in 6-12 months from now

The Citibank analysts expect the US Dollar to depreciate 3%-4% in 6-12 months:

  • “As the Trump fiscal stimulus fades in terms of the delta to economic activity, we think long term yields have likely peaked, the spot US curve will continue to flatten, which may undermine the USD.”
  • “More medium term, as yield spreads fall, FX depreciation likely continues. In our forecasts, as US developments become less US Dollar positive, policy elsewhere may support other currencies.”
  • “Our point forecasts show the US Dollar around flat vs. G10 over the next 3 months and around 3-4% weaker over 6-12 month.”
  • “Positive factors: In the event of severe risk-off in markets, USD may resume its safe-haven status, which may support the USD.”

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