Nordea analysts forecast near-term USD support due to elevated US yields and resilient economic indicators.
The US Dollar is expected to remain supported in the coming months as the Federal Reserve maintains a hawkish stance and US economic data stays firm. Analysts cite stronger growth and inflation dynamics in the US compared to peers, which justify higher yields and limit downside risks for the currency.
While markets anticipate a gradual depreciation over the medium term, the Fed’s higher-for-longer rate policy is likely to keep US yields elevated. This outlook contrasts with expectations of improved global growth and tightening cycles from other central banks, which may eventually weigh on the Dollar.
Risks to this view include a sharper US slowdown prompting earlier Fed cuts or a renewed inflation surge extending Dollar strength. Both scenarios could alter the currency’s trajectory in the near term.