Currency analysts recommend fading the USD rebound in early September
VIX volatility decreased but FX implied volatility remains high in carry pairs
USD could see a near-term rebound due to positive seasonal patterns
UBS downgraded USD outlook into end-2024 and 2025 due to structural weakness anticipated later
Look to fade the currencyβs rebound early in September
Market fears persist despite lower VIX levels
Limited buildup of positions indicates limited FX blowup
Recommend taking advantage of near-term correction to position for more structural USD weakness later
UBS sees EURUSD at 1.12 by year end and 1.15 by end-2025
The firm suggests investors to take a bearish stance on the US dollar
UBS recommends selling into any strength in the US dollar
UBS Downgrades Long-Term USD Targets
UBS has downgraded its long-term US dollar targets, citing structural weakness anticipated later into end-2024 and 2025.
Analysts Suggest Fading USD Rebound
Currency analysts recommend fading the USD rebound in early September, as market fears persist despite lower VIX levels.
Near-Term Rebound for USD Expected
The USD could see a near-term rebound due to positive seasonal patterns, but investors are advised to take a bearish stance and sell into any strength in the currency.
Positioning for USD Weakness Later
Despite a corrective rebound in the USD anticipated in the near term, investors are recommended to take advantage of this correction to position for more structural USD weakness later on.
Implied FX Volatility Remains High
While VIX volatility has decreased, FX implied volatility remains high in carry pairs, indicating a potential limited FX blowup.