Fanon Credit: Buy the dollar on dips ahead of the U.S. election

Valentin Marinov, an analyst at Fanon Credit, said that there are currently two driving factors that seem to determine the price trend of the US dollar. One is that the return of the "Trump trade" encourages investors to buy the US dollar against the backdrop of expectations of higher US inflation and rising US Treasury yields. The second is that investors have reassessed the outlook for the Fed's policy, and the recent positive data released by the United States has unexpectedly increased the attractiveness of the US dollar. While some positive factors related to the Federal Reserve may affect the price of the US dollar, bets that Trump will win the election may keep market demand for the US dollar high in the short term. Since some positive factors that are favorable to the US dollar have already emerged, we believe that the US dollar will only resume its recent gains if there is unexpectedly positive data from the United States and/or unexpected hawkish actions by the Federal Reserve. That being said, we still believe that the US dollar should continue to be bought on dips before the crucial US election on November 5. (Jinshi)