UBS Downgrades Long-Term US Dollar Targets, Eyes Rebound Fade in September
UBS has recently downgraded its long-term US dollar targets and is looking to fade the currency’s rebound early in September. The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower to 101.655 at 08:45 ET (12:45 GMT), following a climb to a two-week high of 101.79 at the beginning of the week. Additionally, the Euro rose 0.1% to 1.1048 after hitting a two-week low earlier in the week.
Analysts at UBS noted that negative seasonal patterns for the month of September over the past decade have caused market fears, especially with US August employment data scheduled for release on Friday. While there may be a near-term rebound in the USD, UBS expects it to be corrective in nature rather than persistent. The bank has downgraded its USD outlook into end-2024 and 2025, anticipating more structural USD weakness later on.
In conclusion, it is important to be aware of these shifts in the currency market as they can impact investment strategies and financial decisions. By staying informed and understanding the reasoning behind these forecasts, individuals can better position themselves for potential market movements and take advantage of opportunities that may arise.