Investing.com — The price rose to multi-year highs on Friday, hitting a level that one expert said would mark the pricing of the ‘Trump Trade’, leaving little room for further upside and creating an opportunity to turn bearish on the dollar.
Yields rose 0.5% to 109.67, having previously reached 109.91 – the highest level since November 2022.
“Start selling the dollar if our DXY 110 target is exceeded. Slowing global growth and a relatively more aggressive Fed are priced in. This also applies to the presidency of Donald Trump,” says Chester Ntonifor, Foreign Exchange/Global Fixed Income Strategist at BCA Research. in a note.
The company claims that this level would have fully priced in the “Trump trade” and would have started from significantly overvalued levels.
The call for a weaker dollar comes as the strategist believes “the US inflation rally, especially compared to other markets, is in its final stages,” amid expectations for a US slowdown.
While the latest jobs report for December signaled little sign of a slowdown, Ntonifor sees a risk of the US economy slowing due to “tightening US financial conditions.”
Looking ahead, Ntonifor suggested that a potential scenario could unfold later this year where “stock markets correct, the US dollar falls and bond yields fall.”
