US dollar: Looking for a gradual softening over the medium term – Wells Fargo
|Analysts at Wells Fargo, point out that with many G10 central banks likely to begin tightening monetary policy ahead of the Federal Reserve, they remain of the view for a gradual softening in the US dollar over the medium term.
Key Quotes:
“Even if inflation does prove to be to some extent transitory, combined with the overall growth recovery from the pandemic, it appears to be leading toward the start of a global tightening—or a policy normalization—cycle. Several emerging market central banks have already raised policy interest rates. In 2021, we expect central banks in Norway and New Zealand to begin raising interest rates, in 2022 we anticipate interest rate increases to begin in Canada and the United Kingdom, and we see the Federal Reserve raising interest rates starting in 2023.”
“The U.S. dollar may get some support for now, while COVID uncertainties persist and as the Fed appears to be moving closer to a slowing in bond purchases. Still, with many G10 central banks likely to begin tightening policy ahead of the Fed, our view remains for a gradual softening in the U.S. dollar over the medium term.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.