USD should remain supported into year-end – Danske Bank

Kristoffer Lomholt, Senior Analyst at Danske Bank, sees the greenback keeping its strength towards the end of 2016.

Key Quotes

“Today it is all about the US election. The USD has rallied after the US FBI in a statement on Sunday cleared Hillary Clinton in the additional investigations with respect to Clinton’s use of personal mails”.

“Over the next 24 hours, we will most likely see a lot of volatility and given that the market has more or less priced out a Trump win (again), risks have become more asymmetrical. If Trump wins, we still expect EUR/USD to rise to 1.13-1.14 within a few days, while we estimate USD/JPY would fall to 100. If Clinton wins, we would look for a slightly stronger USD short term versus most G10 currencies”.

“We expect EUR/USD to reach 1.0950 in the coming days and expect to USD to remain supported going in to the FOMC meeting on 14 December, where the Fed will likely increase the Fed Funds Rate by 25bp”.

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