Juan Perez, senior foreign exchange trader and strategist at Tempus Inc., agreed with the underlying theme of the notes but more as a euro bear than a dollar bull.
His timing however was different from Kaplan’s.
“I’m bullish on the U.S. dollar. Two years is a big commitment but for next year I certainly see the dollar continuing to appreciate.
“I don’t look so much at the U.S. I look at Europe. To me, it’s not so much about the strength of the U.S. economy. It’s more about structural and political problems in Europe,” he said.
Last year, he said, the situation was in reverse: the major currencies were recovering against the dollar.
“The perception was that Trump was actively campaigning for a weaker dollar in order to encourage stronger exports.”
But this perspective faded this year after Europe appeared weaker than previously thought, he noted.
“In 2018 the reality of Europe and the U.K. started to become more obvious.”
He pointed to the “Brexit uncertainty,” “Italy becoming a big problem” and “political risks” in general.
“Next year we need to watch out how the euro zone deals with the possible implications of the anti-establishment sentiment,” he said.
“With Brexit, the U.K. has created a major headache by voting itself out of one the world’s largest economies. It’s a much bigger issue than a Donald Trump renegotiating trade agreements.
“I wouldn’t bet on a stronger euro.”