TS on the US dollar, this in summary
- recent Fed pivot has caused the dollar to depreciate since the start of July
- much of this has been against the Japanese Yen, which has climbed approximately 10% over the past month, as the BOJ takes a different path of finally raising interest rates
We think the greenback could well be in for a reversal through year-end if market focus shifts back to geopolitical factors and flight-to-safety trades kick back in, to the benefit of U.S. dollars. One such event is what happens with the U.S. election. Does it open the door to a rehashing of trade disputes, the potential for tax cuts, and greater uncertainty for America's peers? Even if the Fed cuts rates aggressively, investors may seek the shelter of King Dollar once again.
