Barclays discussed its outlook for USD in a recent note to clients, maintaining a bullish bias and targeting EURUSD at 1.16 by the end of Q2 and 1.14 by year-end.
Barclays explains:
The USD remains king of the beasts… The dollar offers the best of both worlds: G10-leading growth that bests all but a handful of EM, and a recent track record as the best-performing safe haven. On its eponymous smile, it seems to simultaneous reside at both ends at once, like Schrodingers cat in two simultaneous states, as markets bounce between radical post-COVID uncertainty and ebullience on surging US data. Amid a bond market selloff that challenges the relative safety of duration, this gives the USD an attraction in global portfolios that is unmatched as a hedge on equity risk.
Yet, after years of appreciation, the USD remains overvalued, although down from last year’s risk-driven surge. Hence, we expect the dollar’s Schrodinger’s cat grin to keep it buoyant at elevated levels, but not lead to significant appreciation.
Barclays explains:
The USD remains king of the beasts… The dollar offers the best of both worlds: G10-leading growth that bests all but a handful of EM, and a recent track record as the best-performing safe haven. On its eponymous smile, it seems to simultaneous reside at both ends at once, like Schrodingers cat in two simultaneous states, as markets bounce between radical post-COVID uncertainty and ebullience on surging US data. Amid a bond market selloff that challenges the relative safety of duration, this gives the USD an attraction in global portfolios that is unmatched as a hedge on equity risk.
Yet, after years of appreciation, the USD remains overvalued, although down from last year’s risk-driven surge. Hence, we expect the dollar’s Schrodinger’s cat grin to keep it buoyant at elevated levels, but not lead to significant appreciation.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.