Forex Flash: Too early to call for a USD bull market – ANZ

FXstreet.com (Barcelona) - According to Richard Yetsenga at ANZ, “In our view recent data continues to support the view that the dollar is structurally vulnerable. The basic balance deficit remains very wide, the global private sector only tends to increase Treasury buying when there is a flight from somewhere else, there has still been no obvious recovery in FDI despite all the talk of offshoring.”

This is the indeed the largest area of potential movement in the view, and remains an area to watch, and the improvement in the current account looks to be glacial (and will potentially cease this year as US domestic demand outperforms the rest of the G4). However, “This doesn't mean the dollar stays weak against everything all of the time, but does suggest that quality currencies will remain strong. Moreover, the dollar is likely to remain broadly negatively correlated with risk. It is still not yet time to call for a dollar bull market.” he adds.