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JPMorgan Sure Dollar Weakness Is Temporary Amid US Exceptional Situation

Schedule dollar index at intervals of 1 day

The dollar’s losing streak in the current quarter amid falling yields in the US is a “correction against the trend” and, according to JPMorgan, should be temporary.

Recent economic data confirms that the recent “wrong” rate movement is technical and temporary, JPMorgan analysts noted in their review. The US exclusive position should remain the fundamental support factor, so it is too early to write it off.

US President Joe Biden at the end of April is expected to announce the next round of budget spending, worth about $ 2 trillion. At the same time, the acceleration of the pace of vaccination will help maintain the existing gap with the rest of the world.

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JPMorgan remains long against the dollar against the currencies of countries where central banks are likely to remain pigeon-holed or struggling to grow. Among the main currencies, the bank considers the euro, yen, franc and pound as such.

In 2 weeks, the dollar index fell by 1.8%. If April had already ended, it would have been the worst result in 2021. In November 2020, the dollar index fell by 2.3%, then by 2.1% in December. However, from January to March inclusive, the dollar index was growing steadily. At the same time, the 2.6% growth in March was the most significant since November 2016, when Donald Trump unexpectedly won the US elections.

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