We expect the US dollar to make more headway

We haven’t been surprised by this year’s rise in the US dollar’s value against other “majors”, despite investors’ dovish reassessment of the outlook for Fed policy. Despite its pull-back today, we forecast that the greenback will appreciate further this year, even as rates fall by more in the US than investors are anticipating. This is tied to our view that it will benefit from another slump in the prices of risky assets.