Investing.com – The US dollar has been on an ascending slope since its lowest level at the end of September 2024, and UBS thinks that this short -term force is likely to persist during the first half of the new year, with a margin of exceeding .
At 1:20 p.m., the, which follows the greenback against a basket of six other currencies, was negotiated 0.5% lower, but won almost 4% in last year.
Better upcoming American data (non -agricultural jobs and purchasing directors) – and with this, American yields moving upwards – provided large support for the dollar, said UBS analysts in a note.
In the rest of the world, the economic news has been rather mixed, the growth prospects for Europe remaining very low. The acceleration of growth in China suggests that there is growth outside the United States. However, taking into account the risks linked to American customs duties, it is unlikely that strengthening activity in China is changing the feeling of investors and putting an increase in the dollar increase, in our view.
In the short term, the opposite winds that brake the dollar seem limited, added the Swiss bank.
“American exceptionalism seems to reaffirm itself, American economic data should remain solid in the short term and the risks of American inflation increase again. The latest growth and inflation dynamics have strengthened growth and inflation forecasts to United States, which could allow the Fed to maintain its status quo in 2025. “
At least in the short term, markets are likely to think so, while other key central banks are likely to further reduce their rates.
-The potential for divergence from monetary policies is a powerful engine, which causes trends in foreign exchange markets and a risk of exceeding exchange rates.
American customs duties are also looming on the horizon and weigh on feeling. The fear of customs tariffs is that they have inflationary consequences. Since inflation scars are still fresh in the minds of investors, they dominate market accounts.
“That said, we believe that a key rate of 4 to 4.5 % in the United States remains restrictive and constitutes an obstacle to economic growth and inflation. It is unlikely that it will change in the absence of Tangible evidence that productivity increases in the United States, which could occur given the evolution of the AI and the investments associated with it, “added the Swiss bank.
It seems that the elements unfavorable to the market of the new Trump program (for example, customs duties, trade tensions, immigration) are easier to implement and more likely to occur before the elements favorable to the market ( For example, tax reductions, deregulation).
“We believe that a negative impact on American growth is not at all taken into account on the exchange market, which is not the case for the rest of the world, in particular Europe,” said UBS.
“Consequently, we continue to think that 2025 could be a story with two voices – force in the first half, and partial or total reversal in the second half. The fact that the dollar is negotiated with multi -year summits in highly overvalued territory and that the Positioning of investors (such as speculative accounts on the term contract market) is high supported by this story. “
