• News
    • Stocks
    • Banks and Finance
    • Companies
    • Crypto
    • Forex
  • Videos
  • Articles
    • Forex CRM
    • Crypto Payments
    • Trading
    • Crypto Exchange Business
    • Forex Business
    • Fintech
    • Liquidity
    • FinTech Awards
  • Liquidity Providers List
  • Crypto Payment Providers

Dark Theme

Wait, What’s Happening With The Dollar? Here Is What To Expect Next.

Dec 01, 2022

Wait, What’s Happening With The Dollar? Here Is What To Expect Next.

Strange times to be a currency trader. The Federal Reserve raised interest rates by nearly four percentage points to fight the worst inflation since the early 1980s. The U.S. Dollar Index (DXY), which analyzes the dollar's performance against a basket of currencies, rose 16 percent in the first ten months of this year, the highest since 1985.

Other countries also raised interest rates, but the United States raised them faster, prompting investors to buy the dollar to take advantage of the higher returns. Russia's invasion of Ukraine and the consequent spike in the price of oil increased the dollar's appeal as a safe haven currency.

November, on the other hand, has a different scenario to tell. The dollar fell 4.94% until late Wednesday afternoon, as data showing that inflation is slowing fueled hopes that the Fed may slow its rate hikes. The drop in the dollar index was the worst since September 2010, when it lost 5.39%.

Investors will likely wonder if the dollar has hit its top and is heading lower. This would be good news for U.S. multinational corporations whose revenues from international sales have been hurt by the currency's strength. The answer is nuanced: the dollar has the potential to rise, but any gains it achieves are unlikely to be prolonged, according to economists and currency strategists at UBS, BofA, and others.

"We do see some chance of the dollar recovering momentum in the near future," said Brian Rose, senior economist at UBS.

Rose's explanation is based on dropping oil prices: West Texas Intermediate crude oil futures peaked in March at $123.70 and had fallen to $80.55 as of Tuesday's closing. Prices may recover, according to Rose, who reminded investors that Europe is still debating price limits for Russian oil exports. According to the analyst, a rise in oil prices would "harm the market," driving investors away from riskier investments and back into the dollar.

In a recent research note, BofA analysts led by David Hauner stated that the firm expects the opportunity for the dollar to strengthen in the first quarter of 2023 before peaking. Тhe global economy is still at risk of stagflation (a mix of poor growth and high inflation), making central banks worldwide respond by hiking interest rates.

The dollar would benefit if the Fed raised interest rates more aggressively than other central banks. The consensus opinion is that the Fed will raise rates more slowly at its policy meeting on December 13-14, with a half percentage-point hike compared to 0.75-point increases at the previous four sessions. However, other central banks have also already lowered their tightening pace.

While short-term uncertainty benefits the dollar, there is widespread agreement that the currency will slump at some point in 2023. Hauner expects a peak after the first quarter, partly because he sees a case for China abandoning the zero-Covid 19 policy that has hampered its economy. This could ease the supply-chain issues affecting businesses, improve sentiment about the global economy, and reduce the need to keep dollars as a haven currency.

Roger Hallam, global head of rates at Vanguard, fully agrees. Along with the China issue, he believes the gap in rate hike aggressiveness between the Fed and other central banks would close, depressing the dollar in 2023.

"The dollar will inevitably give up its gains," Brian Rose also added, describing the currency as overpriced. "It's difficult to maintain this level."

So let's expect some volatility in the near future.

Subscribe Our Newsletter

Insider News: Goldman Sachs’ Top Equity And Credit Strategists Lay Out Their Approaches To Investing
Insider News: Goldman Sachs’ Top Equity And Credit Strategists Lay Out Their Approaches To Investing

The Russian invasion of Ukraine is the latest aspect contributing to 2022 being a more challenging year for markets than many analysts predicted. Commodity prices are soaring as supply networks are once again knocked off course, and inflation is at its highest level in 40 years.

Banks and Finance
Crypto Takes Another Big Hit: Auditor for Binance and Crypto.com Cuts Ties with the Industry

Alexander

Crypto Takes Another Big Hit: Auditor for Binance and Crypto.com Cuts Ties with the Industry

Accounting firm Mazars Group has decided to distance itself from the crypto industry as uncertainty and massive withdrawals are hitting the key players in the sector.

Crypto
Liquidity Provider

What is a Liquidity Provider?
Let's find out what a liquidity provider is and what to consider when choosing a reliable liquidity provider.

discover
An Introduction to KYC: What it is and Why it Matters

Oliver

An Introduction to KYC: What it is and Why it Matters

Security is one of the main aspects of people's well-being. Security control at airports, for example, is not a huge surprise for us since so many people gather in one place to travel. To get on the plane, we need to provide an ID card.

Fintech

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries b2broker

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Alexander

    Full Bitcoin Price History: From 2009 to 2022

    https://liquidity-provider.com/app/uploads/2023/01/cover-11-300x203.png

    Constantine

    Top 5 Most Reliable KYC Technology Providers

    https://liquidity-provider.com/app/uploads/2023/01/cover-10-300x203.png

    Alexander

    The Best Crypto Wallets of 2022: Top 5 Picks

    https://liquidity-provider.com/app/uploads/2023/01/cover-2-300x203.png

    Alexander

    Top 5 Most Reliable Forex Brokers of 2022

    https://liquidity-provider.com/app/uploads/2023/01/cover-1-300x203.png

    Constantine

    5 Top-Tier Breakthrough Trading, Crypto and Fintech Industries Software Solutions in 2022

    https://liquidity-provider.com/app/uploads/2023/01/cover-300x203.png

    Constantine

    5 Most Successful FinTech Industry Startups in 2022

    https://liquidity-provider.com/app/uploads/2022/12/cover-300x203.png

    Constantine

    Top 7 Liquidity Providers of 2022

    https://liquidity-provider.com/app/uploads/2022/12/liquidity-provider-3-300x203.png

    Alexander

    Top 5 Crypto Exchanges of 2022

    https://liquidity-provider.com/app/uploads/2022/12/liquidity-provider-1-300x203.png

    Constantine

    Top 5 Most Distinguished White Label Solutions in 2022

    https://liquidity-provider.com/app/uploads/2022/12/liquidity-provider-2-300x203.png

    Constantine

    What is Crypto Leverage Trading And How Does It Work?

    https://liquidity-provider.com/app/uploads/2022/12/oblozhka-5-300x203.png

    Constantine

    Top 5 Most Prospective Tokens in the Metaverse.

    https://liquidity-provider.com/app/uploads/2022/12/cover-7-300x203.png

    Constantine

    How to Mine Bitcoins? – Beginners Guide

    https://liquidity-provider.com/app/uploads/2022/11/cover-5-300x203.png

    Oliver

    Blockchain for Business. Pros & Cons

    https://liquidity-provider.com/app/uploads/2022/11/oblozhka-1-300x203.png

    Constantine

    The Future of Stablecoins and Central Bank Digital Currencies (CBDCs)

    https://liquidity-provider.com/app/uploads/2022/11/cover-3-300x203.png

    Alexander

    What is Web 3.0 and Why Does it Matter?

    https://liquidity-provider.com/app/uploads/2022/11/cover-1-300x203.png

    Constantine

    5 Benefits of Accepting Crypto Payments for Your Business

    https://liquidity-provider.com/app/uploads/2022/11/cover-300x203.png

    Constantine

    Hot Wallet vs Cold Wallet: Which Do I Need More for Crypto?

    https://liquidity-provider.com/app/uploads/2022/11/oblozhka-5-300x203.png

    Alexander

    What is Hedging and How Does it Work in Trading? — Ultimate Guide

    https://liquidity-provider.com/app/uploads/2022/10/oblozhka-4-300x203.png

    Oliver

    Pre-execution vs Post-execution: What’s the Difference?

    https://liquidity-provider.com/app/uploads/2022/10/oblozhka-1-300x203.png

    Constantine

    What is Slippage in Trading? – Definition

    https://liquidity-provider.com/app/uploads/2022/10/shapka-1-1-300x203.png

    Oliver

    How Forex Brokers Make Money? – A-Book vs. B-Book Model

    https://liquidity-provider.com/app/uploads/2022/10/shapka-2-300x203.png

    Oliver

    What is the Ethereum Merge, And How Will it Change Ethereum?

    https://liquidity-provider.com/app/uploads/2022/10/shapka-1-300x203.png

    Alexander

    How to Spot Cryptocurrency Scams

    https://liquidity-provider.com/app/uploads/2022/10/shapka-300x203.png

    Milena

    Exploring the Metaverse: What Does It Mean for the Future of the Internet?

    https://liquidity-provider.com/app/uploads/2022/10/oblozhka-300x203.png
    • News
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
    • Articles
      • Forex CRM
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
    [email protected]

    © 2023 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy