XE Market Analysis: North America – Sep 01, 2020

The dollar weakening trend has continued. The narrow trade-weighted USD index (DXY) fell to a new trend low at 91.75, a level last seen in April 2018. Bearishness about the U.S. currency abounds, especially in the wake of Fed’s lower-for-longer regime shift on interest rates. Negative real rates in the U.S., and this year’s sharp narrowing in Treasury yields versus foreign counterparts, along with stronger relative growth differentials globally, are being cited in many market narratives. Concerns about U.S.