After losing a little of its strength... Analysts confirm that the US dollar will be at its strongest in the coming weeks.

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After losing a little of its strength... Analysts confirm that the US dollar will be at its strongest in the coming weeks.

 The US dollar is bleeding from its strength and retreating a little... and returning soon

Analysts at MUFG explained that the strength of the US dollar has lost a number of its momentum, but the argument for more continued and deeper selling isn't yet convincing. They view global growth concerns as supportive of the dollar. They added that the Fed's policy focus isn't yet cautious enough

  it's clear that the dollar has lost some momentum in recent weeks. Declining US yields and a short lived  improvement have weighed on global investor sentiment regarding risk appetite in the US dollar along with an increase in recession risks in the US.  This leaves the US dollar susceptible to  further declines in the near term.  However, we remain unconvinced that  the huge USD sell-off will continue beyond the near term. The Fed's policy shift isn't cautious enough, and when combined with global slowdown/recession fears that are expected  to accentuate , we believe that the dollar's recent downward correction  is probably going to be temporary. the sole exception is the USD/JPY pair as we remain more confident that the USD may have already peaked against the Japanese yen.

 Recession fears and therefore the  accompanying drop in US bond yields have triggered a sudden downward correction in the USD/JPY pair over the past two days, with the pair dropping around 5 digits because it moved below last month's high so far at 139.39.The recent developments have made us more confident that the USD/JPY pair may indeed have made the highest  along with long-term interest rates in the US. Market expectations of policy divergence between the Fed and therefore the Bank of Japan are beginning to diminish now as the US interest rate market looks ahead and begins pricing in further rate cuts next year.”

 Inflation reduction bill

 Meanwhile, Democratic Senator Joe Manchin said Wednesday during a  statement that he struck a deal with Senate Majority Leader Chuck Schumer to support the 2022 Inflation Reduction Act. during a joint statement, the 2  leaders confirmed that US Senate Majority Leader Chuck Schumer and Senator Joe Manchin had agreed.On a deal handling climate change, taxes, health care and therefore the energy crisis. However, Manchin emphasized that he wouldn't support policies that would make the country more dependent on "foreign energy and supply chains," nor policies that might  "risk bringing the country closer to an unstable and weak European energy model."

 The bill aims to tackle the matter of inflation by paying off the national debt, lowering energy costs and lowering healthcare costs."We must be honest about the economic reality that America now faces if we are to avoid fanning the flames of inflation," Manchin said."In essence, the aim of reconciliation is to put our economic and financial home in order."

 Next week, the United States Senate will consider the bill, titled the Inflation Reduction Act, which must pass all 50 Democratic votes."The costs of the investments are going to be paid in full by closing tax loopholes on wealthy individuals and companies," the senators commented.

 The US dollar are going to be stronger in the coming weeks

 Wells Fargo, the third largest bank  within the United States in terms of assets and deposits, predicts that the US dollar will remain dominant over the approaching weeks, but its strength will weaken from the primary quarter of 2023. In an update to financial market forecasts, the bank expects that the pound and therefore the euro will continue to struggle against The dollar, but the pound  is probably going to remain supported against the euro. The results suggest that persistent trends of dollar dominance and euro weakness are yet to materialize, with levels likely to be below par in EUR/USD and below 1.20 in GBP/USD.GBP/EUR levels also are likely to be around 1.19 over the approaching months.

 Wells Fargo predicted that the GBP/USD  rate of exchange would end at 1.17 in 2022, be at 1.16 by mid-2023 and end next year at 1.18.Wells Fargo forecast the EUR/USD rate of exchange at 0.98, 0.97 and 1.0100 for the identical time frame.  this provides a prediction picture of the exchange rate of the pound to the euro 1.1940, 1.1960 and 1.1683.

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