The US dollar is slipping against both its major peers, the euro and the yen. What’s next? The team at Nomura sees further weakness.

Here is their view, courtesy of eFXnews:

Nomura FX Strategy Research continues to believe that the broad trend in the USD will be lower. Nomura outlines 3 key reasons behind this view. 

“1- The dollar weakness we have seen so far this year has been driven by more than just declining US yields.

2- Current accounts matter too – the US appears to be offering too low real yields for the size of its deficits. To square this circle, either the dollar needs to weaken to make US assets more attractive or US yields need to rise or both. This factor has likely exerted residual downward pressure on the dollar.

3- We still expect the Trump administration to pursue a weak dollar policy, and expect US political risks to continue to weigh on the dollar (while the euro area situation continues to improve),” Nomura argues.

“We look for general dollar weakness against both the euro and yen,” Nomura concludes.