Much? – Rabobank

While the Fed’s guidance and policy decision tomorrow will signal whether the USD selloff of recent sessions is overdone, the US election will set the stage for the greenback through the end of the year and into the new year, notes Rabobank Senior FX Strategist Jane Foley .

The 1.12 level will be a tough resistance for EUR/USD

“Inflation momentum is expected to be higher under Trump’s presidency, given his preference for more tariffs and his desire to make permanent most of the tax cuts he enacted during his first term. Looser fiscal conditions suggest the Fed’s easing cycle could come to an abrupt halt next year.”

“Rabobank expects an election victory for Harris to allow for a more extensive series of Fed interest rate cuts, which would imply a softer profile of the dollar than under the Trump presidency. That said, the outlook for USD crosses also depends on the relative performance of other currencies. It is hoped that this week’s BoJ policy meeting will provide some insight into the timing of a BoJ rate hike.”

“Given the contrasting policy directions of the BoJ and the Fed, we continue to favor selling USD/JPY on rallies. In contrast, the direction of interest rate policy at the ECB is the same as that of the Fed. As it could be argued that a sharp rise in the EUR against the USD could allow the ECB to accelerate the pace of easing, we expect EUR/USD 1.12 to be tough resistance.”