The Dollar’s Losses May Just Be Getting Started
(Bloomberg) — The dollar had an awful December and things may only get worse.
The currency is set to extend losses as a truce in the U.S.-China trade war and signs that global growth is improving sap demand for haven assets, according to ABN Amro Bank NV. At the same time, the Federal Reserve has taken a dovish tilt, which will help shrink the yield premium offered by U.S. Treasuries, says M&G Investments Ltd.
“You had safe-haven support for the dollar in 2019, but we have a trade truce now,” said Georgette Boele, senior foreign-exchange strategist at ABN Amro Bank in Amsterdam. “The dollar is on a path of long-term weakness.”