The speed of the dollar’s rise has been driven by the pace and magnitude of interest rate hikes. In the view of ANZ Bank economists, we are nearing the end of the US dollar’s dominance.
Short-term USD consolidation possibilities
“We expect currency volatility to continue into 2023 as synchronized global tightening cycles and downside risks continue to drive yields.”
“We believe the USD high was set when the DXY touched 114 in September, after rising more than 20% since January. The USD exceptionalism premium has eased on mounting fears of a US recession. Energy and political risk premia in Europe and the UK have also declined.”
“In the near term, there is room for the USD to consolidate. We expect it to receive safe-haven attention due to growing fears of recessions, and there is also room for bright surprises from the Fed that are currently not reflected in pricing.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
