Citi turns negative on the US dollar, warning that a slowdown in US corporate buybacks could reduce demand for the greenback and exacerbate its decline.
Citi turned negative on the dollar, citing risks from a slowdown in US corporate buybacks. Reduced buyback flows would lower demand for USD, adding to pressure from expected Fed rate cuts. This bearish stance from a major bank likely weighs on the dollar index.
Citi's bearish view adds to selling pressure on the dollar, likely pushing DXY lower in the short term.
If US economic data surprises to the upside or the Fed turns hawkish, the dollar could rebound despite Citi's negative outlook.
Citi's bearish dollar view implies potential upside for EUR/USD. As the dollar weakens due to buyback risks and Fed cut expectations, the euro could strengthen against the greenback.
If the dollar weakens due to buyback risks and Fed cuts, EUR/USD could rally as the euro strengthens relative to the dollar.
Weak eurozone data or a dovish ECB could limit euro gains, keeping EUR/USD rangebound.
Citi flipped to a negative stance on the US dollar, citing risks from a potential slowdown in US corporate buybacks. The bank warns that reduced buyback flows could weaken demand for the greenback, adding to pressure from expected Fed rate cuts. This shift signals growing bearish sentiment among major banks toward the dollar.
Citi turned negative on the dollar due to risks from a potential slowdown in US corporate buybacks, which could reduce demand for the greenback. This adds to pressure from expected Fed rate cuts.
US corporate buybacks involve companies using dollars to repurchase their own stock, creating demand for the currency. A slowdown in buybacks could reduce this demand, weakening the dollar.
The dollar outlook is increasingly bearish, with Citi joining other banks in expecting further weakness due to Fed rate cuts and potential buyback slowdowns.