Investing.com — The dollar is now in overvalued territory following its latest Trump-fueled rally, UBS warned Monday.
“We caution that the dollar's valuation appears overvalued at current levels,” UBS analysts said in a recent report.
- InvestingPro is on sale for Cyber Monday! Don't miss this opportunity to take advantage of powerful tools to succeed in the stock market, with 60% off!
The warning comes after the DXY rose about 0.5% on Monday to exceed 106 points, following threats from President-elect Donald Trump to impose 100% tariffs on imports from BRICS countries unless that they commit not to develop a common currency or to support alternatives to the US dollar for international trade.
“The idea that the BRICS countries are trying to move away from the dollar while we sit back and watch is EXTREME,” Mr. Trump wrote in a social media post early Sunday.
The , Indian rupee and South African rand fell slightly.
The dollar's reign on the currency playing field is expected to continue despite growing dedollarization efforts.
The U.S. dollar dominates financial markets and international trade and is used in more than 47% of global payments, according to analysts. 88% of transactions are in favor of the greenback, making it the dominant currency in terms of liquidity.
“While tensions within the global financial system over the dominance of the dollar will continue, we see little that could credibly threaten its reign,” the analysts said.
Although the future of the king dollar continues to be promising, in the short term, analysts recommend that investors take advantage of periods of dollar strength to reduce their exposure to this currency.
Related News :