Latest US Dollar Outlook

The dollar was hammered since March and lost as much as 11 percent.

As I mentioned before my take on this is that we saw here more a kind of Dollar weakness than other currency strength. Mostly this weakness was directly related to the fast reacting FED and their huge amount of monetary measures. This was the start of the weaker Dollar story which will be in my opinion a topic over the next whole year.

But for now the FED announced that there will be no further liquidity and measures provided in the near future. Along with no further stimulus agreement in sight, an overall weaker historical backed cycle in equities during September and October and also still huge short positioning against the dollar, the situation could, and in my opinion already has, changed.

Besides that, potential new Covid restrictions in European countries could get investors back into the safe haven currency, which is the US dollar (watch the graphic below)

That could lead to a stronger dollar in the near future and was also my positioning in the last week, as well as it will be in the upcoming 2-3 weeks.

But be sure that I also stick to the long term weaker dollar picture and a comeback of EM currency as well as the Euro over the long run.

Nevertheless there are many indications from the technical as well as from the fundamental site, that supports a stronger dollar for now.

US dollar outlook september 2020 Lukas Kuemmerle

The US Dollar index broke out of its bearish trend and is still at the beginning of its upside trip. Here you can also identify that my current target price for the DXY is at about 95.91 points.