The dollar was clearly hit hard by the not-too-hawkish meeting minutes released by the FOMC. Is the dollar expected to continue sliding?
RBS says no:
Here is their view, courtesy of eFXnews:
The retreat in the USD should be viewed as the opportunity to buy, says RBS.
“Although admittedly the technical pattern in several currencies suggests the market currently owns USD and is apt to be squeezed somewhat further. The near term direction of the USD may be vulnerable to further weakness, but it is hard to find good reasons to buy EUR,” RBS argues.
“All the reasons that the Fed noted may delay tightening matter even more for the BoE, and yet the BoE is on the whole not voicing these concerns. The risk is that it does, so equally it is hard to buy the GBP,” RBS adds.
“It is still appropriate to hold core long USD positions against both the EUR and GBP, although lightening exposure in the current environment makes sense,” RBS advises.
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