Citi maintains a structural bearish bias on the USD through the year-end.
"Relative US growth outperformance tends to boost the USD, other things equal. But US outperformance matters less coming out of recessions and when US real yields are very low, which is the case presently and our USD bear case did not rely on US growth underperformance," Citi notes.
"We maintain our view that the USD is in a major bear market. Rising US real rates, stalling growth elsewhere and excessive US growth outperformance are risks to our view and we see scope for more short-term volatility in the USD trajectory, particularly if US nominal rates rise sharply," Citi adds.