ANZ looks at the US dollar
ANZ Research discusses the USD outlook and outlines 2 triggers for a broad USD selloff over the coming weeks.
“Before we use this green light to recommend a wholesale ‘sell USD’ recommendation we would like to see two conditions met.
1. The first is a sign that growth is stabilising, either in the US or China or both. A) In China,
the tone of policy makers has started to turn to cross-cyclical
stability so easing may come sooner (though be shallower), in which case
the credit impulse should turn (though for now we estimate that is a
story for October). bB)In the US, we would like to see some stability in GDPNow,” ANZ notes.
2. Market pricing of growth looks more realistic but remains
in line with current growth levels, so is still vulnerable to
disappointment. A bit more overshoot on this front would provide a better entry point to outright short USD positions,” ANZ adds.
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