USD should keep the bid tone into year-end – Danske Bank

Senior Analyst at Danske Bank Jens Pedersen noted the constructive outlook for the greenback in the next couple of months.

Key Quotes

“USD weakened during Wednesday as the midterm election result (divided Congress) wiped out the alternative and more USD-friendly scenario (full Republican control); EUR/USD briefly revisited 1.15”.

“Albeit the knee-jerk reaction has been to send USD weaker, we maintain that carry and cyclical support will keep USD bid into year-end, as notably the support from real rates is set to stay in place. Today’s Fed meeting should not make a big difference besides confirm USD remains very much a carry currency”.