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VIEW: CIBC note that "after considering......>

DOLLAR
DOLLAR: VIEW: CIBC note that "after considering everything, the body of evidence
still points to further downside in the trade-weighted USD for the coming
quarter. The main reasons for additional downside include:
- The supply of USD is still increasing
- Foreign portfolio inflows are at risk
- The Fed's balance sheet is still expanding at an historic pace
- Twin deficits
- A more optimistic outlook for the EU
- Having said that, those that are calling for a 'crash' in the USD need to dial
it down a notch. The USD is not at risk of losing its status as the reserve
currency any time soon. Further downside in the USD should be measured, with the
majors (namely the EUR) and gold benefitting the most.
- Risks to this view include: economies shutting down as a result of a second
wave of COVID-19, failure of congress to pass another stimulus bill, US growth
outperforming and EU recovery fund talks breaking down."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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