The US Dollar is set to weaken, while FX markets could experience a lot of volatility going forward, analysts at Nordea say.
US economy to continue to do well on a global perspective
We believe that lower rates globally will continue to support economic activity and risk sentiment, lowering the appeal of the USD from a safe-haven standpoint. Moreover, our expectations of more near-term rate cuts in the US relative to the Euro area and others such as Japan, the UK and Norway point towards a weaker USD in the years to come. This does not mean that we see a massive USD weakening ahead.
We expect the US economy to continue to do well on a global perspective. Furthermore, geopolitical challenges and the outcome of the US presidential election could see the USD surprising positively ahead.
If Trump is elected again, a highly likely outcome as it seems now, the USD should again benefit from its safe-haven status. However, deficit worries are more likely to appear under Trump than Biden. If such worries appear again, it could weaken the USD more than we have pencilled in. Both the outcome of key events ahead and how markets perceive the outcomes are challenging to predict, which will continue to contribute to volatile FX markets.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD loses momentum to near 0.6550 ahead of Chinese Trade Balance data
The AUD/USD pair extends the decline to around 0.6565 during the early Asian session on Monday. The Australian Dollar weakens against the Greenback after US President Donald Trump steps up fresh tariff threats. Investors await the release of China’s Trade Balance data due later on Monday ahead of the GDP report for the Q2.
USD/JPY eases from multi-week top; bullish potential seems intact
USD/JPY retreats slightly from a three-week high touched earlier this Monday amid worries that US President Donald Trump's trade tariffs would complicate the Bank of Japan's path to policy normalization. The domestic political uncertainty ahead of the July 20 upper house election could undermine the Japanese Yen.
Gold climbs above $3,350 as Trump rekindles trade tensions
Gold price extends its upside to around $3,365 during the early Asian session on Monday. The precious metal edges higher as traders rushed toward the traditional safe-haven assets after US President Donald Trump widened the global trade war with a fresh wave of tariffs.
Week ahead: A storm of CPI data and China’s GDP in focus amid trade uncertainty
Dollar attracts safe haven flows amid trade anxiety. US inflation data could shake July Fed cut probability. UK, Canadian and Japanese CPI numbers also on tap. Weak Chinese growth may increase calls for more stimulus.
Meme coins to watch as Bitcoin hits record high
Meme coins Bonk, Dogwifhat, and Floki are positioned to extend gains as the weekly recovery reaches crucial resistance levels. The meme coins gain bullish momentum on the back of Bitcoin’s (BTC) recovery run, hitting a new all-time high on Thursday.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.