ING Research discusses the USD outlook in light of the ongoing escalation of trade tensions between the US and China.
"Yesterday’s announcement of 25% tariffs on up to US$60bn worth of Chinese imports is clearly an escalation – and started to elicit some retaliation from China.
A weaker dollar is clearly part of the Trump economic plan. Suffering a large net foreign liability position (around US$8trn), the dollar looks exposed if the investment environment deteriorates.
...With global equity markets still adjusting, we continue to see more downside for DXY" ING argues.