Year-end demand will keep US dollar bid - Credit Agricole

Credit Agricole on the dollar trade Credit Agricole CIB Research sees a scope for further USD strength into year-end. "We note that the demand for the currency in the forward markets have been intensifying of late, as reflected in the widening cross-currency basis swap spreads," CACIB notes.  "We think that these developments reflect a number of drivers: (1) the growing USD rate advantage ahead of Fed taper; (2) importers' hedging flows in countries like Japan and the Eurozone that face soaring energy costs; and (3) growing demand for USD funding into year-end as international borrowers try to lock in more advantageous conditions when rolling their FX liabilities," CACIB adds. For bank trade ideas, check out eFX Plus. Invest in yourself. See our forex education hub.

Year-end demand will keep US dollar bid - Credit Agricole

Credit Agricole on the dollar trade

DXY chart

Credit Agricole CIB Research sees a scope for further USD strength into year-end.

"We note that the demand for the currency in the forward markets have been intensifying of late, as reflected in the widening cross-currency basis swap spreads," CACIB notes. 

"We think that these developments reflect a number of drivers: (1) the growing USD rate advantage ahead of Fed taper; (2) importers' hedging flows in countries like Japan and the Eurozone that face soaring energy costs; and (3) growing demand for USD funding into year-end as international borrowers try to lock in more advantageous conditions when rolling their FX liabilities," CACIB adds.

For bank trade ideas, check out eFX Plus.
Invest in yourself. See our forex education hub.