The Bank of America recommends that the Federal Reserve (Fed) discuss on Wednesday a plan to reduce its asset purchases (“tapering”), which would support the dollar.

The need to normalize monetary policy should be illustrated by strong growth in gross domestic product in the second quarter and consumer spending, the releases of which are due on Thursday. Thus, "we believe that the Fed will lay the groundwork for an upcoming purchase reduction announcement at this meeting, which will confirm the reality of the divergence in monetary policy in the United States", underline BofA analysts. In this context, the dollar should continue to appreciate against the currencies of central banks with less leeway to tighten their monetary policy, in particular the euro. BofA expects the euro to trade at $1.15 at year-end, up from $1.1786 currently.