The Bank of America has warned that the US dollar can be for a rough tag -day, which has fallen dramatically this year.
The dollar index, which monitors the value of the US dollar against major currencies, dropped nearly 9% to 99.74 this year, while President Donald Trump’s warfrieving a trigger Moved away from US ownership.
The Bank of America expects the continuous dubbing of data driven data in the summer. The weakness in the US dollar is widely seen as positive for assets that denomination dollars, such as gold and bitcoin
.
The FX’s global research team led by Athanasios Vamvakidis stated in a report to clients on Friday that tariffs were more detrimental to the US economy while the country was more trading worldwide than maybe overseas.
The report recognized the recent stability of the US economy and growth-supporting development, such as President Donald Trump’s tax deduction and the abandonment of severe reduction in fiscal spending, but said that “negatives are dominant.”
“Policy uncertainty in many fronts remains. Companies can pause rent and investment plans until there is more clarity. In most cases, we see tariffs higher than the starting point, with current levels minimum,” the report said.
It added that the market has been a negative reaction to the leadership of fiscal policy at a time when debt levels are at record highs, leading to increased borrowing costs. Meanwhile, the Federal Reserve will not be able to take significant action due to increased inflation expectations.
“Moving flows have collapsed. Increased demand in Q1 (front running) leads to tariffs but may fall,” strategic mentioned, pointing to weakness in high -frequency indicators such as ISM data and weekly Dallas Fed Economic Index.
The weekly Dallas Fed Economic Index continued on the downtrend following a short spike in early April and hit the lowest since December, according to Data Source TradingView.
“Such high-frequency indicators tend to be noisy but can still be directed to a slowing economy in the coming months,” strategists said.
