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Dollar’s Best Days Look Numbered Amid Rush to Front-Run Fed

  • Greenback gains set to slow in 2022 with rate hikes priced in
  • Morgan Stanley, JPM Asset still expect rise against euro, yen
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Investors are primed for the dollar to climb next year. But the juiciest trades may be over even before 2021 ends. 

Everyone from Morgan Stanley to Sumitomo Mitsui Trust Asset Management to Lombard Odier predict a stronger greenback in 2022 -- with the caveat that its advance will be tempered. That’s because traders have been front-running a hawkish Federal Reserve, opting to buy the world’s reserve currency against virtually all of its peers before borrowing costs rise.