A senior economist from Yale warned last night that the dollar could decline by as much as 35% in the near future as the world begins to doubt “US exceptionalism”. As our quarterly currency forecasts show, such predictions even from Yale professors, are essentially hot air, but the dollar does continue to face headwinds.
USD rallied yesterday against GBP, but the US dollar index shows it is still weakening against its main competitors as a whole. The euro has been trading at around its highest rates for 18 months against the dollar in the past two weeks. On the plus side, Americans have kept spending, with retail sales surging in May well ahead of expectations.
It’s a busy middle of the week for the dollar, with US Federal Reserve Chair Powell testifying today and widely expected to dampen any positive thoughts on the US economy recovering quickly, and jobless claims for June coming out tomorrow.
