- Relative growth trends that had been supporting the dollar
- Increasing desynchronization among developed countries in terms of economic cycles and fiscal and monetary policies
- Impact of commodity demand on currencies
Several drivers that were behind the dollar’s strength now look set to reverse, such as the overinvestment and overconsumption of technology. There are some cyclical tailwinds that could still sustain the currency’s strength nearer term, and Anujeet and Katie assess the possibility that the dollar spends the better part of this year in some type of a topping pattern. Fundamentally, however, they conclude that the factors that drove the dollar up over the last decade are reversing, increasing the likelihood of a sustained, multi-year dollar decline from here.
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