U.S. Dollar’s Rally Likely Nearing Its Peak, Barclays Says
- Monetary policy, U.S. growth boosting currency near term
- The dollar seen weaker as global growth catches up to the U.S.
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The dollar is likely to head higher in the coming months before weakening in the second half of the year as the outperformance of the U.S. economy fades and investors’ risk appetites improve, according to Barclays Plc.
While tighter monetary policy, a resilient U.S. economy and demand for havens due to the Russian war in Ukraine should support the dollar in the short term, that may reverse as global growth improves, strategists Aroop Chatterjee, Ashish Agrawal and Themistoklis Fiotakis wrote in a note to clients Tuesday. Overvaluation of the greenback, crowded positioning and a “stretched” current-account deficit should also weigh on the U.S. currency in the second half of this year.