Citibank sees 2.1% rise in DXY in three months – Bloomberg
|Although the US Dollar Index (DXY) appears overbought, market strategists stay bullish on the greenback’s gauge versus the six major currencies ahead of preliminary readings of the Michigan Consumer Sentiment Index (CSI) and the next week’s Federal Open Market Committee (FOMC) meeting.
“An overvalued dollar is now the only possible hedge for what’s turning into the biggest destruction of shareholder value since the global financial crisis, according to macro strategists at Citigroup Inc.” reported Bloomberg.
The update also mentioned, “With global equities already down $23 trillion in 2022, the greenback’s inverse relationship to risk assets makes it the only game in town for at least the rest of the year, the strategists wrote in a note dated Sept. 15.”
“It would take a ‘deep recession’ to push US inflation significantly lower, implying a prolonged drop in corporate profits and equities before the Federal Reserve pivots,” stated the Citibank per Bloomberg.
Also read: US Dollar Index bulls approach 110.00 with eyes on Michigan CSI, Fed
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