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Ekonomické zprávy
25.10.2021

The case for a stronger USD is compelling against the low yielding currencies – MUFG

FXStreet reports that Lee Hardman, Currency Analyst at MUFG Bank, expects the US dollar to strengthen against the euro, the Swiss franc and the Japanese yen. 

“The Fed is beginning to display more concern over the risk that higher inflation could become more embedded in the economy. It provides justification for the Fed to begin QE tapering from next month and to bring QE to an end by around the middle of next year. That would then leave open the second half of next year for the Fed to begin raising rates if higher inflation proves more persistent than policymakers currently believe.” 

“Support for the US dollar from higher US yields has been dampened so far this month both by the improvement in global investor risk sentiment, and by similar rise in yields outside of the US on average in other G10 economies.”

“The case for a stronger US dollar is more compelling against the low yielding G10 currencies of the EUR, CHF and JPY where market participants are more comfortable that their domestic central banks will keep rates low despite higher inflation.”

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