Copyright © HT Digital Streams Limit all rights reserved. A bank employee poses with USD 100 Note. (AFP) Summary The dollar is struggling, and streets overwhelmingly agree that it is even lower. But with such a strong consensus on a negative outlook, any positive news about the Greenback can remain an unexpected – and much more difficult -. The dollar is struggling, and strategists overwhelmingly agree that it is even lower. But with such a strong consensus on a negative outlook, any positive news about the Greenback can remain an unexpected – and much more difficult -. For investors, it is a risk worth considering now. The US dollar index, which measures the value of the dollar at a basket of foreign exchange, dropped as low as 0.45% during Thursday’s trading before recovering. The WSJ Dollar Index, a similar but newer index, dropped during the session at the low of summer in the summer 2023, but ends at 95.21, a level that is not very important. It is good for Wall Street’s big banks, which increasingly predicted a dollar route. On Thursday, Deutsche Bank’s macro strategist Tim Baker said the proposal for new foreign investment levies contributes to the firm’s clumsy view on the dollar. Bank of America’s foreign exchange strategist Alex Cohen referred to his team as “Core Dollar Bears.” Morgan Stanley’s Matthew Hornbach expects the dollar to slip in 2025 and part of 2026. That’s not all. JPMorgan Chase, Goldman Sachs and Société Générale Streets are other part of this view of the near-consensus over the Greenback. It is important to note that Wall Street does not predict a total downfall for the US dollar: the currency is entrenched within global financial machinery, and any significant disconnection by foreigners selling US assets can take years. Big money managers, hedge funds and other institutions that owned many dollars by overweight US stocks or other dollar-denominated assets are reconsidering exposure among a new, fast regime in Washington, DC President Donald Trump’s rates, also less dollars in the hands of other countries, as they sell less goods in the US. assets. The usual role of the dollar as a safe haven and a buffer against market fluctuations is also questioned: The Greenback does not respond to moves in the S&P 500 and other major indices as it did. But here’s the Kicker: Even with many factors pointing to further dollar weakness, it’s not crazy to think that the dollar can rise – and that makes the group think of the dollar risky. Economic data can give the dollar a much -needed boost. The initial unemployed claims published on Thursday were higher than economists expected. However, the unemployment rate remained fairly steady at 4.2%, and inflation seems more or less in control; An improvement on the economic front can strengthen the dollar. “Although the USD prospects in the longer term are still clumsy, a move lower from here may need signs of cracks that form in the economic data,” Kit Juckes, chief FX strategist at Société Générale, wrote on Monday. Trump’s developing tariff policy is another wild card. Trump said he had a ‘very good’ phone call on Thursday with Chinese President Xi Jinping, which probably led to the dollar moderating his losses. It is unclear where negotiations between the US and Europe are, Cohen pointed out in a note in which he was an upside -down risk to his clumsy call. However, the most harsh rhetoric between the US and foreign forces was soon run back, he wrote. Goldman has listed the return of US exceptional conversation as ‘the greatest risk of our forecast for further depreciation of dollar’. If Trump uses money from rates as fiscal support, it could eventually strengthen the dollar – and foreign investors could possibly be drawn by even higher returns on bonds and cheaper valuations on stocks. If pessimism is so strong, it is wise to consider whether the market can have other plans that can make a sudden setback. Write to Karishma VanJani at karishma.vanjani@dowjones.com. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #US Economy Read the following story
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