UBS has recently issued a warning about the potential for further declines in the value of the U.S. dollar, citing a range of economic factors. The U.S. dollar index has already decreased by 3% over the past month, and UBS predicts a continued depreciation in the coming months due to several key pressures:
Narrowing Interest Rate Differentials: As other central banks, like the European Central Bank and the Swiss National Bank, adopt a more cautious approach to interest rate cuts compared to the U.S. Federal Reserve, the dollar’s previous advantages in yield may diminish.
Increasing Fiscal Deficits: UBS highlights ongoing concerns regarding the U.S. fiscal deficit, which poses long-term risks to the dollar’s strength.
Market Reassessments: Investors are advised to reconsider their portfolios, with suggestions to hedge against currency risks and diversify into other currencies, particularly the euro and the British pound, which UBS has upgraded to “Most Preferred”
Overall, UBS’s outlook indicates a complex economic landscape for the dollar, driven by both domestic fiscal concerns and international monetary policy shifts.
(COINOTAG NEWS)(Binance)