USD: More or less? – Rabobank
Source Fxstreet
While the Fed’s guidance and policy decision tomorrow will signal whether the selloff in the USD over the past few sessions is overdone, the US election will set the scene for the greenback into year-end and through the start of the new year, Rabobank’s Senior FX Strategist Jane Foley notes.
The 1.12 level to be tough resistance for EUR/USD
“The inflation impulse is expected to be greater under a Trump 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 suggests that the Fed easing cycle could come to an abrupt halt next year.”
“Rabobank expects that a Harris election victory would allow for a more extended series of Fed rate cuts which would imply a softer profile for the greenback then under a Trump presidency. That said, the outlook for the USD crosses also depends on the relative performance of other currencies. It is hoped that this week’s BoJ policy meeting will offer some sense of the timing of further BoJ rate hikes.”
“In view of the contrasting BoJ and Fed policy directions, we continue to favour selling USD/JPY on rallies. By contrast the direction of interest rate policy at the ECB is the same as the Fed. Since it could be argued that a sharp rise in the value of the EUR vs. the USD could allow the ECB to step up the pace of its easing, we expect EUR/USD 1.12 to be tough resistance.”
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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