Danske Research discusses its expectations for the USD direction in the near-term, and thinks that the broad USD strength and global recovery set to continue.
" We continue to be optimistic about the prospects for a modest global recovery driven by past easing and fading political risks, which still bode well for cyclical/carry currencies. We expect the broad USD appreciation cycle to remain intact as the Fed is unlikely to erode the still-significant USD carry," Danske notes.
"Near term, the prospect for a possible rate cut from the Bank of England (BoE) dominates in the central-bank sphere – and could drag GBP down further. But, we note also that the clearing skies globally and in Euroland could lead the ECB to drop its easing bias down the road; this should hold a hand under EUR/USD, after all," Danske adds.