Report
One should not be swayed by the appreciation of the dollar in the short term
Since the beginning of the second quarter of 2018, the dollar has appreciated against most other currencies. This can be attributed primarily to the rise in risk aversion, which, as is usually the case, has attract ed capital to the United States from emerging countries in particular. US monetary policy plays a secondary role here, as expectation s of future dollar interes t rates did not change much in the second quarter of 2018. One should not be swayed by this appreciation of the dollar since the start of the spring of 2018. Rather, our view is that the dollar will change course and start to de p reciate under the effect of: The fiscal policy conducted in the United States at a time when the economy is close to full employment, which will worsen the US external deficit; The slowdown in US growth due to the return to full employment, which can be expected to lead the Federal Reserve to raise its interest rates by less than what it current ly project s .
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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