Citi discusses the USD outlook into year-end and notes that it will likely be driven by Fed liquidity injections to meet USD demand.
"Citi analysts point to the first of the Fed’s term repo operations overnight to cover year-end - a 42 day operation which is oversubscribed nearly twice over (to imply solid demand for USD liquidity). Next term repo operation is expected to run over year-end (currently scheduled for the 2nd of December)," Citi notes.
"If this operation is similarly oversubscribed, Citi analysts expect the Fed to announce additional repo operations over the turn with larger sizes on the 12th December. Anything less, and USD could potentially spike further.
For the remainder of this week however, activity is likely to be subdued ahead of US Thanksgiving holidays," Citi adds.