Morning Call: Ultra-dovish Fed prompts broad risk-off
The extent of the Fed's circumspection at yesterday's policy meeting has sent the US dollar and equities lower, while the usual safe havens – gold and the yen – are poised for gains.
The market got a bit ahead of itself in positioning for further strength in the euro and weakness in the US dollar in Q2. But after the enormous correction and USD rally, we look for the USD to find a top in the second half of the year and to begin heading lower again. The world can’t afford a strong dollar and once the Trump tax and fiscal stimulus fades, the US will have a hard time finding the USD buyers to offset it enormous external imbalances.
Saxo Bank's Quarterly Outlook for Q2 is here, with expert insights and trading themes from our team of strategists. Get your copy here.