The US dollar has generally lost further ground this week and the DXY index currently sits at around its lowest level since February 2022. This index has now fallen by more at this stage in the year than in any previous year since the US moved to a free-floating exchange rate in 1973. At this point, further weakness could become self-reinforcing as underhedged European/Asian portfolios chase the move. So, we suspect that this could be a pivotal period for the greenback – either it turns around here or there is another ~5% fall around the corner.
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