Investing.com — The dollar is now in overextended territory after the latest Trump-fueled surge, UBS warned Monday.
“We warn that the dollar’s valuation appears overextended at current levels,” UBS analysts noted in a recent report.
The warning comes after the DXY rose about 0.5% to above 106 points on Monday, following newly elected President Donald Trump’s threats of 100% import tariffs on BRICS countries unless they commit not to a single currency develop or support alternatives to the US dollar for the international economy. trade.
“The idea that the BRICS countries are trying to move away from the dollar while we watch is OVER,” Trump wrote in a post on social media early Sunday.
The Indian rupee and the South African rand fell modestly.
The dollar’s reign as king of the currency playground is likely to continue despite increasing de-dollarization efforts.
The US dollar dominates financial markets and international trade and is used in more than 47% of global payments, the analysts said. The dollar remains on one side of 88% of all transactions, making it the world’s dominant currency in terms of liquidity.
“While tensions in the global financial system over the dollar’s dominance will continue, we see little that credibly threatens its dominance,” the analysts said.
Well, the future for the King Dollar continues to look bright. In the short term, the analysts advised investors to use periods of strong USD to reduce exposure to the US dollar.
