USD suffering from a bout of January Blues - ING

According to Viraj Patel, Research Analyst at ING, there are a multitude of factors for their broadly bearish $ view – the ambiguous economic and repatriation effects of the GOP Tax Bill, an unsettled US political backdrop ahead of the November midterm elections and the better goldilocks investment opportunities outside of the US.

Key Quotes

“The latter two factors in particular is seeing the USD lose its role as an investment currency – and trading under new rules where an environment of rising US rates no longer guarantees $ strength. Greater synchronicity across bond markets – amid a broadening global economic recovery – is one factor we’ve touted before. But we also see the Fed as a negligible factor for the USD in 2018 – not least because of the internal dichotomy of views over the key issues related to the US economic outlook. This ‘Fed confusion premium’ – which will be clear in the latest FOMC minutes released today – may keep short-term US rates and the US dollar at bay in the near-term.”