Citi discusses the USD outlook and maintains a bearish bias over the medium-term.
"The latest CitiFX Flows & Positioning highlights that with the move in US yields, short term USD positioning is now in long territory. The recent dollar buying has been concentrated amongst leveraged investors, with only slight inflows from real money. With overall USD positioning slightly long, and with our expectation that real yields begin to move lower again, we continue to like USD shorts," Citi notes.
"We remain bearish USD, and expect the downtrend to resume as US real yields top out. Continued Fed dovishness remains important for our view, in addition to global recovery, so we’ll watch upcoming Fed-speak closely," Citi adds.