A renewed surge in dollar appreciation would not be justified – Commerzbank

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The US dollar was able to gain across the board on Tuesday. Economists at Commerzbank believe that a fresh wave in dollar appreciation would not be justified.

“Long-term inflation expectations (5×5) are still stable, and there are no indications that the market expects rampant inflation as in the 1970s/80s as a result of the early rate cuts. Nevertheless, higher inflation in the long run also implies a less strong dollar – assuming that other central banks are more determined in their fight against inflation.”

“Currently, however, there are no signs that the Fed is taking a significantly different course compared with other central banks. Hence, a renewed surge in dollar appreciation would not be justified in our eyes.”

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