USD to face tough year in 2018 - Analysis

USD to face tough year in 2018 - Analysis
Societe Generale expects the USD index to drop 4.5% by the end of next year

Mubasher: The US Dollar is heading for its worst year in more than a decade, despite the current strong economic growth in the Unites Stated, the expected tax cuts and interest hikes, according to a recent report by Societe Generale.

The US Federal Reserve is expected to raise interest rates in its upcoming meeting, for the third time this year, with the same number of interest hikes expected next year.

Meanwhile, the Senate has recently approved the tax bill, paving the way for the biggest tax cuts America has seen since the 1980’s.

However, analysts believe that the steady unraveling of the USD will be tested next year, with a rise in global growth, and many central banks adopting a more aggressive policy.

Societe Generale expects the USD index to drop 4.5% by the end of 2018.

“Beware of sleeping volcanoes and seriously undervalued currencies,” analyst and global fixed-income strategist Kit Juckes wrote in the report, as quoted by Bloomberg.

With global “growth becoming more balanced and more synchronized, the dollar looks expensive.”

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Source: Mubasher

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