Investing.com — The dollar rose slowly on Wednesday and will remain king of the currency playground until US “economic exceptionalism” cools, paving the way for the Federal Reserve to chart a clearer map for rate cuts.
rose 0.15% to 105.66
“Until the rest of the world starts to outpace the US, and until the Fed sets a clearer horizon for the start of policy easing, we continue to believe it will be difficult for the currency to recover against the USD,” said Macquarie in Wednesday comment.
“American economic exceptionalism” remains the “dominant theme” in the currency market, Macquarie said, and has encouraged the Federal Reserve to take an aggressive stance at a time when other central banks appear to be signaling that interest rates will be cut sooner rather than later .
The Fed continues to sound “by far more hawkish than the ECB, BoE, BoC and RBA,” Macquarie said, noting that the PCE price index on Friday and US GDP on Thursday will be closely watched.
However, the bump in the road for the dollar could not come until late summer, Macquarie said, although he cautioned that several factors will have to come together, including a further slowdown in inflation, slowing growth in the eurozone and easing geopolitical unrest.
However, there are some signs that other economies are recovering as recent economic data from Britain and the euro surprised the upside yesterday and helped the recovery, but “there will be an extended period of outperformance by the rest of the world needed.” to shake confidence in American economic exceptionalism.”
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