Trade-weighted US Dollar to fall by a cumulative 12.5% from Q1-2023 through end-2024 – Wells Fargo
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Economists at Wells Fargo still forecast renewed strength in the trade-weighted US Dollar through until Q1-2023. However, they now expect a more extended period of greenback weakness beyond that.
“With inflation nearing its peak, we believe the US Dollar could quite possibly have already reached its cyclical peak as well.”
“In the near term, the resilience of the US economy (in contrast to recession in Europe) and a still hawkish Fed should see renewed greenback gains. However, over the longer term, growth and interest rate trends should swing sharply against the Dollar, as the US falls into recession from the middle of next year, and the Fed cuts rates aggressively in 2024.”
“We see a moderate 3.5% gain in the trade-weighted Dollar through early 2023, followed by an extended 12.5% decline thereafter.”
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