CIBC Research discusses the USD outlook and targets the USD Index (DXY) at 92.55, and USD/JPY at 101 by end of Q1 of next year.
"(DXY) The USD is still responding to global risk sentiment, weakening when its safe haven status becomes less of an attraction. But rising Covid cases in Europe and North America have helped steady the dollar’s hand, and uncertainties over the election result could extend this pause for the greenback," CIBC notes.
"But we still see the USD weakening in the early months of 2021. That comes despite the sharp, consumer-led rebound in economic activity in the US in the third quarter. That relied on a drawdown in savings (Chart 2) that had in part been funded by fiscal stimulus, the next round of which has been delayed by a political stalemate," CIBC adds.