Bank analysts expect renewed weakness of the US currency due to disappointment from the meeting of the Federal Reserve last week (21 September). They believe that the market will probably continue to calculate in the prices the fact, that the Fed will delay further tightening of monetary policy. In the short term real yields on US should remain low and the positioning of the dollar has the potential to increase. At the same time risky assets (shares) should continue to decline, analysts say.Even if the Fed raise rates in December, analysts believe that the dollar is at risk of weakness in the coming weeks.
Therefore, in the short term they prefer to take a tactical short position in the pair USD/JPY. They emphasize that this is a short recommendation, which is not in contradiction with their forecast level of 108.00 at the end of 2016.
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