The dollar's bull run is poised to continue, with the DXY closing over 104 to give the rally further impetus - ING.

The dollar is set to rise dramatically as a result of global events. The dollar's boom in 2022 may well turn into a bust in 2023, but ING economists aren't yet pronouncing a top in the currency.

April 28, 2022 - 01:33 PM 268 views

The dollar's bull run is poised to continue, with the DXY closing over 104 to give the rally further impetus - ING.

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© The dollar's bull run is poised to continue, with the DXY closing over 104 to give the rally further impetus - ING.

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The dollar is set to rise dramatically as a result of global events. The dollar's boom in 2022 may well turn into a bust in 2023, but ING economists aren't yet pronouncing a top in the currency.

In 2022, the dollar will be soaring, but in '23, it will be bust.

"The Federal Reserve appears to be on the verge of launching an aggressive tightening cycle this year to combat inflation." While Europe is dealing with its own growth problems and countries like China and Japan are still in monetary easing mode, war in Europe and the risk of an abrupt cut-off in Russian gas are hurting European growth prospects and local currencies. Asia, on the other hand, is dealing with its own growth problems and countries like China and Japan are still in monetary easing mode. This atmosphere is unlikely to change in the next six months, implying that the dollar's Bull Run will continue."

The strong dollar and robust domestic demand are sucking in imports and expanding the trade deficit, which is the Achilles Heel of this currency boom. One emerging narrative is that, similar to the 1980s, Fed efforts to combat inflation will send the dollar skyrocketing, and the 2022 dollar boom will transform into the 2023 dollar bust if the Fed cuts rates by the end of the year, as we expect. For the time being, the story will be dominated by the dollar's rise."

"Closes over 104 DXY signal that the dollar rise is about to accelerate."

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