Merril Lynch Says USD Bears to Win Out in September

It’s been a rough year for the dollar already. But the U.S. currency might be facing one more selloff before rising interest rates carry it higher.

In a note published Wednesday, a team of currency and interest rate strategists at Bank of America Merrill Lynch said dollar bears might win out one last time in September as investors grapple with the outcomes of three events with the potential to upend global financial markets: Policy meetings at the Bank of Japan and Federal Reserve, and an unofficial gathering of the Organization of the Petroleum Exporting Countries.

The strategists shifted their view after the dollar failed to rally in response to the August jobs report last week. The charts, they say, now suggest the U.S. currency has further to fall before the rebound begins.

But the weakness will likely be short lived. It’s already looking stretched by a historical standpoint, the strategists said, noting that the dollar has fallen 18% against the yen in the last 12 months.

On Wednesday, the dollar  slipped 0.3% to ¥101.74.

via MarketWatch

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.