Dollar Gloom Scenario Faces Test With Market Risks Mounting
- Debt-ceiling, recession scenarios are perils for dollar bears
- Volatility surge also a risk, coinciding with greenback gains
Photographer: Scott Eells/Bloomberg
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Wall Street’s bearish stance toward the dollar, about as pronounced as it’s been since early 2022, is on the cusp of a serious test.
Markets are entering a stretch that’s full of risk, with pivotal central bank meetings looming and the clock ticking on the all-important US debt-ceiling standoff. It all comes against a backdrop of worries about a potential US recession — or even a stagflation scenario — after the Federal Reserve ratcheted up borrowing costs to tame inflation.