Nomura on the USD – the NFP report is not a reason to turn bullish on it

Forex

A Nomura response to the nonfarm payroll number out of the US on Friday.

The better than forecast NFP result is not a reason to turn to a long US dollar position. The EUR sell-off result in response to the release was due to a crowded long position only. Nomura remain bears on the USD vs. EUR.

Says that there may be reasons ahead to turn bullish on the US dollar:

  • if lockdowns extend in Europe
  • if the European Central Bank cuts interest rates
  • and is US-China trade tensions escalate

But that the risk of any of these is low in the short-term.

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