Investors expect U.S. dollar to break higher as Fed battles inflation
Investors are anticipating a potential rise in the U.S. dollar as the Federal Reserve focuses on combating inflation. The dollar has been in a narrow trading range but may break higher due to rising Treasury yields and inflation concerns linked to the ongoing U.S.-Israeli conflict. Analysts suggest that if oil prices remain elevated and the Fed signals tightening, the dollar could strengthen further.
- ▪The U.S. dollar has been stuck in a tight trading range but may break higher as inflation concerns grow.
- ▪The dollar index has increased nearly 1.5 percent since late February, approaching the top of its trading range.
- ▪Higher Treasury yields and inflation expectations are making the dollar more attractive to investors.
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ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountThe U.S. dollar, long stuck in a tight trading range, could be in for a break higher as the Federal Reserve shifts its focus to fighting worrisome signs that inflation is heating up.In the first half of last year, the dollar slumped nearly 11 per cent. Since then, it has settled into a narrow trading range, frustrating both those anticipating deeper losses and those hoping for a meaningful rebound.Investors are eager to get the dollar’s direction right, given the currency’s pivotal role in global finance.A softer dollar lifts profits for U.S. exporters by raising the value of repatriated foreign revenues. It also makes international assets more appealing to U.S.
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