US Dollar Fundamental Forecast: Bullish
USD Talking Points:
- US President Donald Trump reportedly tested positive for Covid-19 Friday morning, leading to even greater uncertainty in the late stages of the election
- The September NFPs[1] this past week reminded investors of the convergence between the pandemic, economic health and polls
- Looking out through the end of the year, there is a split between ‘before the election’ and ‘after the election’ for which the Dollar will be a focal point
In volatility terms, the Greenback closed out this past week with seeming reserve. However, the calm was a loaded one given the heightened threat of so many systemic risks surrounding the currency – and ‘risk trends’ at large. The top concern to close out this past week was the news that US President Donald Trump had tested positive for the coronavirus.
Headlines around the pandemic are not at all novel. However, the market had grown somewhat anesthetized to the topic these past months as the social and political implications did not translate into the economic and financial fears as distinctly. That isn’t to say the coronavirus wasn’t taking a serious toll on the forecast for economic activity. It was with reports like the NFPs showing a slowed path of recouping lost jobs from February and headlines that major US corporations like Disney and American Airlines was laying off or furloughing thousands of employees. However, this was apparently not pointed enough to shake confidence.
In the US, the federal government’s resistance to re-shutter the economy to fend off a revival in Covid cases meant the economy could stretch further for some months – though a true resurgence could shutter the economy via consumer and business habits eventually. Yet, with the President contracting the virus, the dynamic
