European politics come to the fore - ANZ

Analysts at ANZ explained that, for now though, the expectation that an expansionary fiscal policy will come when the economy is operating at full employment should continue to lend support to the USD. 

Key Quotes:

"Barring some shock, the FOMC should announce a 25bps rate rise in the fed funds target on 14 December whilst the ECB is expected to extend its QE program when it meets on 8 December. 

There is also the potential for a rise in uncertainty should the referendum in Italy fail on 4 December, not to mention elections in the Netherlands, France, and Germany next year.
The European dimension is an important element in our expectation of further dollar gains in the coming months and that could deteriorate further. 

Would an additional 5-10% political risk premium be required if the European political environment deteriorates in the near term? Probably, but as opinion polls have shown this year, forecasting political outturns is very difficult. 

With that in mind and given the direction of travel in policy divergence, we continue to maintain a bullish disposition towards the USD vs EUR."