Not Even the Fed Can Keep the Dollar Down
Demand for havens as the global economy slows will more than offset any weakness from lower U.S. interest rates.
It’s the dollar’s time to shine.
Photographer: Adrian Dennis/AFP
The Bloomberg Dollar Spot Index is poised for its worst month since January 2018. The good news for those bearish on the greenback is that it probably has further to go. The bad news is that the downward trend won’t likely last very long and the path of least resistance is higher.
There are numerous reasons for why the dollar has been under pressure lately. At the top of the list are the Federal Reserve’s dovish pivot and President Donald Trump’s increasingly vocal desire for a weaker currency, abandoning the U.S. government’s long-held doctrine that a strong dollar is in the nation’s best interests.