Investing.com – The US greenback has weakened in opposition to most main currencies within the wake of the Federal Reserve’s dovish shift, and additional falls lie forward, in line with Capital Economics, with a Trump win being the potential wild card.
With the dollar near the underside of its post-2022 vary, “our sense is that within the close to time period a interval of consolidation is extra probably than additional sharp falls,” mentioned analysts at Capital Economics, in a word dated Sept. 26.
That mentioned, “we nonetheless count on the dollar to weaken a bit additional over the course of 2025 as short-term rates of interest fall additional and threat sentiment stays sturdy amid a world restoration and a inventory market bubble pushed by ‘AI’ hope,” Capital Economics added.
This central situation is based on coverage continuity within the US.
“If former president Donald Trump is elected, we’d count on the greenback to understand, at the least within the brief time period, within the expectation of upper tariffs and US rates of interest,”
On stability, Capital Economics forecasts the to finish this yr a little bit stronger, earlier than falling to round 98 by the top of 2025.
At 08:35 ET (12:35 GMT), the Greenback Index, which tracks the dollar in opposition to a basket of six different currencies, traded 0.1% decrease to 100.489.
