Dollar Outlook Firms as Global Risk Trends Cool and Yields Rise

 Dollar Outlook Firms as Global Risk Trends Cool and Yields Rise

US Dollar Fundamental Forecast Talking Points

  • The Dollar ended the third quarter with a meaningful technical breakout, backed by hearty fundamental themes previous ignored
  • Monetary policy forecasts find the Fed making a clear effort to acclimatize the markets to an impending taper, which would be a turning point in the bank’s policy cycle
  • If risk trends collapse, the Fed may have to delay its plans to normalize; but the Dollar also has a safe haven appeal that could benefit in most scenarios

We are heading into the final quarter of 2021 with an unmistakable sense of change underway. The tempo of the global economic recovery from the pandemic-led recession slowed noticeably. Central banks were starting to ease up on their exceptional support structures, initially through ‘tapering’ their massive stimulus programs. Further, there were financial stains showing through different systemically important areas such as the Chinese real…

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