PRESS ROOM
Dollar makes gains but how far can it go?
Friday 30th July '21
The market has interpreted the Federal Reserve (Fed) to be somewhat more hawkish lately than other central banks, widening the expected interest rate differentials between the US and other countries, thus providing upward dollar pressure. However, we observe that periods of strong increases in the US budget deficit and current account deficit are usually followed by periods of dollar depreciation. This structural force is only in its early phases and so we could see the dollar resume is depreciation path is started in 2020 in coming months.