Investing.com — Citi strategists encouraged investors to “buy US dollar dips tactically” in the wake of Donald Trump’s win in the elections.

The bank expects the greenback to see further upside, especially against the euro (EUR) and Scandinavian currencies (Scandies), citing the recent underperformance of these currencies.

Despite the uncertainty surrounding the House’s outcome, strategists note that the lack of ticket-splitting could suggest a “red wave” is more likely with a Trump win, strategists said in a note.

They believe that foreign exchange (FX) markets will continue to focus on tariff-sensitive currencies, as fiscal policy developments may take time to materialize. Market participants may also await confirmation of the House going to the Republicans before expecting broader fiscal policy changes.

Citi’s team voiced caution about immediately following the USD rally, pointing out that the market is already somewhat long on USD and anticipating the Federal Reserve (Fed) to maintain a dovish stance in its upcoming meeting on Thursday.

The firm points out that its strategy typically avoids chasing momentum, preferring to wait for a potential dip in USD following the Fed’s meeting to buy into the currency.

In the report, strategists also flagged downside potential in currencies vulnerable to tariffs, such as the (CNH), (TWD), and (THB), which are considered clear shorts.

In the G10 currencies, the EUR is seen as an obvious candidate for selling due to its bilateral trade surplus with the US.

“This also extends towards Scandies (NOK and SEK), which are effectively higher beta EUR,” strategists led by Daniel Tobon noted.

“NOK could also underperform on weaker oil under Trump, though we note NOK and oil correlations tend to be short-lived,” they added.

SEK, meanwhile, remains highly sensitive to the global manufacturing cycle, and strategists expect trade and tariff wars to “remain disruptive to a manufacturing recovery.”

Citi maintains that a full “red sweep” in the US elections could justify a 5% appreciation in the USD. The bank’s analysis suggests there is still room for a further 3.4% downside in before the impact of Trump’s policies is fully reflected in the currency pair.

The bank said it will be watching for a re-test of the trend line at around 1.0790 to sell into, with tactical supports around 1.06-1.0630, but they do not rule out a move towards 1.0350-1.0450 based on their residual analysis.