USD: ‘Shutting Down’; Staying Bearish As US Govt Shutdown Looms – Barclays

The US dollar is clearly on the back foot, falling across the board. There may be another reason for further falls: a potential for a government shutdown.

Here is their view, courtesy of eFXnews:

Barclays Research discusses the USD outlook and notes that the renewed expectations of core central bank policy normalization and concerns about US policy priorities brought back USD softness after a short break early in the year, especially against JPY and EUR.

“The 19 January government shutdown deadline looms and negotiations around the budget, immigration, DACA, and the border wall will gather attention.

We remain bearish USD in the medium term as the cyclical advantage of the US erodes amid expectations of the start of policy normalization in core economies,” Barclays argues.

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