ING Research discusses the USD outlook in light of the latest trigger that has been added to USD weakness on the back of US Treasury Secretary Mnuchin’s comment that a “weaker dollar is good” for the US.
"It feels like what we expected to happen to the dollar over the entirety of 2018 has in fact transpired in first few trading weeks of the year.
We suspect it is the sheer frankness of Mnuchin’s comment and the idea that the Trump administration is happy to employ ‘America First’ policies – even if it means at the cost of a weak $ – that has caught markets by surprise.
We’re scratching our heads for catalysts to see a break in this weak $ trend," ING argues.
Source: ING Global Markets Research