USD seen stronger in the next months – UOB

Peter Chia, FX Strategist at UOB Group, expects the greenback to gather further traction in the upcoming weeks.

Key Quotes

“The current move in dollar index (DXY) resembles that of in Oct-Nov 2015 as markets positioned ahead of the first rate… Reusing the playbook, we are probably heading for higher USD in Nov”.

“Without taking away the punchbowl, it’s also important to note that attributing higher USD to rate hike expectations whilst may be true on a daily basis, looks rather stretched from a longer term sustainability point of view, as seen from DXY running way ahead of further rate expectations. In all, it’s probably “buy dollar on rumor, sell after the fact” again”.