Flash: USD to remain well supported but pace of gains to slow - BTMU

FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Market Research at the Bank of Tokyo Mitsubishi believes that the key for the dollar will be maintaining expectations of an eventual end to QE.

Further, he feels that perhaps recent gains may have been fueled by an earlier than expected start to QE tapering. He sees that a September start date is still some way off and hence some modest retracement of recent dollar gains is possible. However, he still expects the dollar to strengthen over the next 3, 6 and 12 months, and writes, “On a DXY basis, we expect a 6.4% increase to 89.2 over the 12 months to take us back to the levels the dollar traded at after the collapse of Lehman Brothers in 2009.”