- Analytics
- News and Tools
- Market News
- Time is coming for a USD correction, but bears will have to remain patient – Scotiabank
Time is coming for a USD correction, but bears will have to remain patient – Scotiabank
The Federal Reserve lifted its policy rate 75 bps to 3.25%. The USD advanced in response to the announcement. Economists at Scotiabank believe that the greenback is set to remain firm for now, but sustained gains are unlikely.
USD appears quite significantly overvalued
“We expect the USD to remain firm in the short run but we remain reluctant to factor in additional, sustained USD gains from here and we think it would be complacent to dismiss out-of-hand downside risks here. This is sounding a bit like a broken record but the salient points remain that 1) the USD appears quite significantly overvalued. 2) The USD now looks quite fully priced, with peak Fed funds expectations having advanced by more than 100 bps since early August. 3) Speculative and leveraged accounts have turned more bullish on the USD and hold the biggest combined (net) USD long since February.”
“The counterarguments in favour of the USD remaining strong for now are clear. 1) Elevated geo-political and market risks support USD demand. 2) Alternatives are scarce and the USD is still the ‘least dirty shirt’ among the G10 currencies.”
“We think the time is coming for a USD correction but dollar bears will have to remain patient for a little longer.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
