US Dollar Resurgence May Be Around the Corner, According to Barclays Currency Strategist – Here’s Why: Report
The US dollar could be on the verge of a comeback, as indicated by a foreign exchange strategist at Barclays. Skylar Montgomery Koning, in an interview with Bloomberg, suggested that the dollar has already factored in the negative effects of President Donald Trump’s tariffs, leading to a 10% decline so far this year. Koning believes that the dollar is poised for a rebound against other currencies.
“The easing of some of the more concerning policies from the US government, along with successful trade deals being negotiated, suggests that the economic impact on the US may not be as severe as initially anticipated,” Koning stated.
Currently, the US dollar index (DXY) is trading at 97.57, showing signs of potential strength. This optimistic outlook from Barclays follows a challenging first half of the year for the US dollar, with the DXY experiencing its most significant drop since 1973.
On the other hand, Kathy Jones, a chief fixed income strategist at Charles Schwab, shared her perspective on US trade policies and potential inflation, suggesting that Federal Reserve rate cuts may be delayed until December or even next year. Rate cuts typically result in a weaker dollar.
Despite this, the CME FedWatch Tool indicates a 62.7% probability of a 25 basis points rate cut at the upcoming Federal Open Market Committee (FOMC) meeting in September. This tool utilizes Fed Funds futures prices to calculate these probabilities.
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