UBS are forthright with their view on the US dollar - "Unattractive" - say to sell bouts of dollar strength to reduce exposure.
UBS cite:
The Fed remains set to lower rates amid lower inflation.
US fiscal concerns are likely to keep the US dollar under pressure.
- in the event of a second Trump administration ... tariffs are likely to hurt US consumers and GDP more than the rest of the world, and deficit concerns may also surface with potential tax cuts
- irrespective of who wins the presidency on 5 November, the growing US federal deficit is likely to come under the spotlight
Other currencies should see additional support
- we still expect a growth recovery in Europe going into 2025
- spillover effects from China’s stimulus efforts and the potential for more risk-on sentiment after the US election should support other G10 currencies, including the euro, the British pound, and the Australian dollar
