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Since the beginning of the week, the greenback has risen by more than 0.7% against the basket of major currencies.
The USD index received support on the decline below the 200-day average, as some players continue to defend the prevailing upward trend.
Some analysts attribute the dollar's appreciation to hopes for progress in trade talks between Beijing and Washington, but it is likely to become cheaper rather than stronger on the news.
It is possible that behind the growth of the dollar are strong macroeconomic indicators for the United States, which convince the market that the Fed is going to take a break in easing monetary policy. In recent days, the chances of a federal funds rate cut in December have dropped from 20% to 5%.
This reassessment of expectations seems to have provided the most tangible support for the greenback.
In addition, there are technical factors. The weakening of the US currency in October sent it to the bottom of the upward trend. A further decline would indicate a breakdown of the upward trend, which arose along with trade disputes in the United States and China. Apparently, players are in no hurry to bet on breaking the trend without any form of trade transaction or cancellation of existing bilateral duties. It is possible that only real shifts in this direction will become the final signal in the reversal of the trend for USD growth.
"Now the market is waiting for confirmation that the first phase of the transaction will be signed," Rabobank said.
According to MUFG experts, weakening or resolving the protracted trade war between the USA and China will have a positive impact on the euro, and the dollar will become the main victim in this case.
"Since the beginning of the escalation of trade tension at the end of the first quarter of 2018, the euro has seen a clear downward trend. Any de-escalation of the trade conflict could lead to some revaluation of Eurozone assets," they said.
Standard Chartered experts believe that the time has come to buy the bottom of the euro amid signs of a revival in the European economy.
They noted a number of positive points: improved data on business activity in the EU, as well as on production orders in Germany.
"Medium-term drivers have also improved in favor of the growth of the single currency. The risk of the UK leaving the alliance without a deal has been significantly reduced, while the potential for tax incentives in the EU has increased. An interim trade agreement between the US and China could also benefit the euro," Standard Chartered strategists said.
They recommend long positions on EUR/USD with a target at 1.1500 and a stop order at 1.0950.
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