Having forecasted the US dollar to weaken around 7% over the next year, the Standard Chartered Analysts points to a likely beginning of a new trend in the US dollar trading.
“USD has been weakening during NY trading hours over the past few days.
Likely to continue if US asset managers continue selling during the domestic sessions.
If this is the start of a new trend of USD selling during US hours, it could be significant as it would signal that we are entering the middle of the USD smile.
‘Dollar smile’ analysis, the currency tends to strengthen in a crisis, weakens when the global economy is healthy and rebounds again when the US outperforms.”
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