Investing.com — The will probably proceed to outmuscle its G10 rivals within the months forward, supported by financial power, earlier than turning decrease within the again half of 2025 as traders reassess the election influence and the Fed delivers extra fee cuts, analysts from BofA stated in a latest be aware.
“We’re first on the lookout for continued greenback assist for the subsequent a number of months on again of ongoing financial outperformance within the US, as we await additional readability from Washington on various anticipated coverage adjustments,” BofA analysts famous.
The greenback’s trajectory is more likely to shift within the latter half of 2025 because the increase from the pricing in a pro-growth financial system underneath a second Donald Trump administration runs out of highway. “Additional out, nevertheless, we see USD power in the end beginning to reasonable this 12 months as nicely,” the analysts stated.
They count on the greenback to weaken because the market has already priced in expectations for maximalist financial coverage bulletins, whereas many development implications should not but factored in.
Whereas the “US exceptionalism” narrative has pushed greenback power, there’s scope for normalization as Washington offers extra readability on insurance policies, they added.
The analysts’ name for the greenback to melt relies on a softer touchdown for the U.S. financial system subsequent 12 months, with situations paving the best way for additional Fed cuts. The analysts count on this to in the end “jumpstart” a moderation in greenback power throughout the second half of 2025, after buying and selling near present ranges by means of mid-year.
