According to analysts at National Bank Financial, the U.S. dollar’s near term prospects remain good amidst a hot economy that is prompting the Fed to tighten monetary policy.
Key Quotes
“The return of risk aversion in the run up to mid-term U.S. elections could also prop up the world’s reserve currency. But with the fed funds fast approaching the estimated neutral rate, the impact of rate differentials on the USD will fade and eventually reverse as other major central banks tighten policy. As such, we continue to expect the trade-weighted USD to weaken next year.”
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