MUFG Research discusses the USD outlook and sees a scope for further gains in the near-term.
"Our momentum indicators do not yet signal any G10 FX currencies being at stretched levels apart from CHF – so there is no real impediment to further near-term gains. The US equity market correction is looking more sustained now having reached 10% from the peak on 2nd September," MUFG notes.
"We have a busy week of macro data next week with the usual turn of the month data ending with the US jobs data on Friday. The US election will increase in importance with the first TV debate taking place on Tuesday...To really turn the market a notable shift in Fed communications on additional easing would be required or significant progress on clarity on the timing of a COVID vaccine. Neither seems likely and we also have month-end flows to contend with next week which are expected to be USD-supportive," MUFG adds.