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Jun 27 - 10:55 AM

USD: The USD Forces Still Present; No Time To Die For The USD - BofA

By eFXdata  —  Jun 27 - 09:30 AM

Bank of America Global Research maintains a bullish bias on the USD over the coming months.

"The Fed remains hawkish, sticking to fighting inflation despite the sell-off in equities. Chairman Powell played down recession risks this week by arguing that the economy was strong enough to handle monetary policy tightening. For inflation to come down from historical highs, unemployment has to increase from historical lows. Even if the US economy avoids a recession, growth will have to drop below potential, in our view," BofA notes. 

"For the USD to weaken, we need the Fed to be more concerned about growth than about inflation, and we are not there yet. The ECB remains behind...For the EUR to strengthen, we need a more hawkish ECB, which may have to wait until they address fragmentation risks. The BoJ is the last dove standing," BofA adds. 

Source:
BofA Global Research

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