After rallying for most of the year against the major currencies the US dollar seems to have stalled over the last week and according to some analysts this might be a sign of things to come.
The catalyst for the dollar’s recent weakness has been US President Donald Trump who has criticized the US Federal Reserve for lifting interest rates and although the US central bank is supposed to be independent of any political interference, it is believed that Trump’s words may have has some influence over Fed President Jeremy Powell.
The Fed is expected to lift interest rates this year 3 more times but if Trump has his way that may not happen which is expected to hit the US dollar as such a scenario is already priced into the Greenback
"I think there's a very high probability that we're in the end game of dollar strength against most currencies," said Bob Parker, an investment committee member at Quilvest Wealth Management
"Are they going to do three next year? I think that one thing that is inconsistent is the Fed giving guidance for three rate hikes next year and forecasting growth next year in America of 2.4 percent. Something's not right there." He added.
Some say that Trump’s words may pressure the US dollar in the short term but ultimately it will be the Fundamental factors that will drive the currency at the moment the US economy is in good shape so it look’s like the US presidents attempt to talk the Greenback down will be in vain.
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