Farmers Credit: Buy the Dips in the US Dollar before the US election

Jinshi data, October 25th, according to Fano credit analyst Valentin Marinov, at present, two driving factors seem to have determined the PA of the US dollar. One is the return of the ‘Trump trade’, which encourages investors to buy the dollar in anticipation of the intensification of US inflation and the rise in US bond yields. Second, investors have reassessed the Fed’s policy outlook, and the unexpectedly positive data released by the US recently has increased the attractiveness of the dollar. Although some positive factors related to the Fed may affect the price of the dollar, bets on Trump winning the election may keep demand for the dollar high in the short term. Due to some favorable information about the dollar, we believe that only unexpected positive data from the US and/or unexpected hawkish actions by the Fed will restore the recent uptrend of the dollar. Having said that, we still believe that it is advisable to continue to buy the dollar until the crucial US election on November 5th.