Market Analytics and Technical Considerations
Daily Trading Insights
Up through Q1-20223, Wells Fargo economists continue to predict that the trade-weighted US Dollar will regain strength. Beyond that, they now anticipate a longer period of dollar weakening.
It’s possible that the trade-weighted US dollar has already achieved its cyclical peak.
We think that the US dollar may have already reached its cyclical top as inflation approaches its peak.
The US economy’s robustness (in comparison to Europe’s slump) as well as a aggressive Fed, should lead to fresh dollar gains in the foreseeable future. However, as the US enters a recession starting in the mid next year and then the Fed rapidly cuts rates in 2024, growth and interest rate trends should turn drastically against the Dollar over the longer term.
Through the beginning of 2023, “we predict a modest 3.5% increase in the trade-weighted Dollar, accompanied by a protracted 12.5% slide subsequently.”
