USD expects to extend gains – Danske Bank

Senior Analyst at Danske Bank Mikael Milhoj expects the greenback to keep the bullish note ahead of the FOMC meeting in December.

Key Quotes

“The rally in the US dollar continued on Friday on the back a sharp rise in US inflation expectations and higher US yields”.

“Clearly, the dominant theme across asset classes is now that Donald Trump as US President will be like Ronald Reagan in his first term, i.e. very large fiscal boost, a sharp rise in inflation expectations and much higher yields”.

“Near term, the USD is likely to strengthen further, particularly versus negative yielding currencies like the EUR, JPY and SEK ahead of a likely December Fed rate hike”.

“Near term, we expect EUR/USD to trade lower into the 1.0700-1.0850 range ahead of the Fed’s decision”.

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