IGM FX and Rates
By Jonathan Cavenagh 28 Jun 2021
Short term momentum looks positive for the USD, but structural headwinds could still undermine the dollar in H2. Several factors, either in isolation or combined, might be needed before the market re-embraces short USD positions – a meaningful position adjustment, more assertive pushback from Fed officials around tightening/taper expectations and the rest of the world, particularly the EU, looking better. US growth upgrades have outpaced the other major developed economies by a comfortable margin in 2021 to date.