USD: Resilience for now, softer over the medium-term – Wells Fargo

Matías Salord FXStreet

According to analysts at Wells Fargo, the US Dollar could remain strong in the short term supported by Federal Reserve policy expectations. They see the greenback weakening over the medium-term.

Key Quotes:

“We see a period of U.S. dollar resilience for now given the Fed's “hawkish” surprise at its June meeting. We still expect a softer U.S. dollar over time however, with several of the G10 central banks set to either slow their asset purchases and/or raise interest rates ahead of the Federal Reserve.”

“Given the solid overall outlook for the U.K. in 2021, we expect the Bank of England to slow the pace of its bond purchases further in Q3. Among the other central banks where we expect a move to less accommodative monetary policy this year are the Bank of Canada (a further tapering of purchases) and Norway's central bank (an initial interest rate increase later in 2021). The likelihood of increased activity from global central banks also underlies our view for a resumption of U.S. dollar softness over the medium-term.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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