Bank of America Global Research discusses the USD outlook and maintains a core bullish view through year-end.
"The end-game we still see is a much stronger US recovery that will eventually support the USD, particularly against the EUR, where the recovery is much slower. The US is following the loosest fiscal and monetary policies ever. The US general government structural balance is at the highest deficit in recent decades. The Fed balance sheet is the largest ever. The Fed monetary policy stance according to a simple Taylor rule is extremely accommodative. If macro policies matter and all this spending is not going to waste, the US economy has to perform strongly," BofA notes.
"Some of these policies may keep the USD weak for now, but we believe that eventually the USD will have to reflect the relative strength of the US economy," BofA adds.