This global recovery is an exception to the ‘sell USD’ pattern – BofA

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Bank of America believes the dollar has room to run

Bank of America Global Research discusses the USD outlook and maintains a core bullish view through year-end. 

The US economy is set to outperform by an
historically-wide margin in 2021 and 2022, making this global recovery
an exception to the 
“sell USD” pattern. We expect supportive capital flows - particularly direct investment - into USD on the back of wide growth and interest rate differentials,” BofA notes. 

We expect USD appreciation concentrated
against lower-beta FX, in particular EUR, where we see policy
normalization as being compromised
. We are constructive commodity currencies experiencing large terms-of-trade gain,” BofA adds.

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