The National Australia Bank FX strategy team sees the dollar index heading to 85.00 in "coming quarters"
Near-term, NAB sees a minor reversal of the recent downtrend in the dollar - but they expect further dollar weakness due to the "breakdown in the relationship between yield differentials and the dollar".
Regarding the recent rise in yields, NAB says that "it can now make something of a comeback as a positive USD influence" but it will not reverse the secular depreciation trend plaguing the greenback.
These are their latest forecasts for major currency pairs:
Source: NAB
