The dollar briefly showed new highs compared to several peers from the G-10. The course turned down after the June data on the US labor market topped estimates. The employment report was stronger overall, but not enough to spark fears of inflation and Fed tightening. This prompts dollar bulls to relax their efforts, analysts say.
How long will the dollar’s weakness last? Is it worth using it to buy the dollar, and in which currency pairs would it be best? Artem Tuzov, Executive Director of the Capital Market Department of UNIVER Capital, answered the question of Fortrader magazine.
– The weakness of the dollar is exaggerated, as are the fears of inflation in the US. The dollar is one of the world’s currencies and freshly printed dollars are absorbed in the world financial markets in the form of liquidity, without spilling over into consumer inflation in the United States. This is partly why the US stock market is showing such a long rise.
Fearing the tightening of the Fed’s policy, raising loan rates and, as a result, the collapse of the bubble in the US stock market, it should be remembered that in this case, American investors will withdraw money from emerging markets. What will provoke a fall in the exchange rate of developing countries’ currencies against the dollar. The Euro may benefit from the weakness of the dollar.