Credit Agricole CIB Research discusses the USD outlook around this week's FOMC policy meeting.
"We note that some negatives associated with the change in guard in Washington DC are already in the price of the USD. In the near-term, the ongoing fiscal stimulus talks in the US and the outcome of the December FOMC meeting this week could attract considerable attention. Global risk appetite could also suffer if the US politicians fail to agree on a stimulus package and the FOMC keeps its monetary policy stance little changed (as we would expect)," CACIB notes.
"Subsequently, the USD could recover some ground vs riskcorrelated currencies but also consolidate vs the JPY and the CHF, especially if UST real yields stabilise in the wake of the Fed," CACIB adds.