By Yasin Ebrahim
Investing.com – The greenback seems set to snap a three-week win streak Friday, and whereas analysts expect short-term features to renew, the longer-term outlook for the buck is much less convincing.
The , which measures the buck’s energy towards a trade-weighted basket of six main currencies, rose 0.10% to 92.17.
“Within the coming weeks, the greenback is extra more likely to acquire on account of the robust restoration of the US financial system. Nonetheless, it’s more likely to weaken once more versus the euro within the second half of the 12 months,” Commerzbank (DE:) stated.
The gloomy outlook on the greenback comes as traders are reining of their bets on inflation spiraling uncontrolled and the Fed appearing sooner-than-expected.
The injection of additional financial coverage from President Joe Biden’s infrastructure plan might show as one other potential supply of weak spot for the buck.
Additional stimulus would “not be the magic method with which to spice up the US financial system … quite, it could solely set off a short- to medium-term synthetic growth, which is just too clearly finite for the FX market to be seduced by it in the long run,” Commerzbank added.
Within the short-term, nonetheless, there may be room for the greenback to journey on the coattails of Treasury yields.
“Our charges staff is anticipating UST yields to be again on the rise subsequent week: in FX, this may increasingly indicate that the greenback can recuperate some floor to low-yielders,” ING stated in a notice.
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