Economists at MUFG Bank discuss USD outlook.

A period of elevated uncertainty could potentially undermine investor confidence further in Europe

Weak PMI data last Friday in Europe has reinforced the expectations that global growth is set to remain fragile and this in turn is likely to help provide the Dollar with ongoing support over the near term. 

The brief mutiny in Russia over the weekend has not had much initial financial market impact but that will be watched closely by investors – the unseating of President Putin may fuel speculation of a sooner end to the invasion of Ukraine but that might not be the case depending on how that would unfold and needless to say, a period of elevated uncertainty could potentially undermine investor confidence further in Europe, which could reinforce USD strength.