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Jul 20 - 10:55 AM

USD: May Have Peaked But It Will Remain Strong Until The Fed Pivots By This Year End Or Even Next Year - BofA

By eFXdata  —  Jul 20 - 09:30 AM

Bank of America Global Research discusses the USD outlook and maintains a bullish bias into year-end.

"Rising inflation from already high levels and very tight labor markets have proved the consensus that inflation will drop sharply completely wrong this year. And yet, the consensus still expects inflation to drop all the way down to 2% in the next two years, with only a mild recession, if at all, unemployment increasing only slightly, and central banks starting to cut rates as early as next year. Persistent inflation has been a key market driver so far and we expect this to remain the case," BofA notes. 

"The USD may have peaked, but we argue it will remain strong until the Fed becomes more concerned about growth than inflation. This could take until the end of this year, or even next year," BofA adds. 

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Source:
BofA Global Research

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