Sky is the limit for the US Dollar – Commerzbank

There is still room for USD upside, economists at Commerzbank say.

The Dollar is unlikely to fall significantly again

The gap between market and FOMC expectations for rate cuts has almost disappeared since the turn of the year, after having priced in significantly more rate cuts last year than the FOMC had anticipated going forward.

Now that the market and the Fed seem to be on the same page, one thing should be clear: until we see data that suggests cracks in the Fed's current story, the Dollar is unlikely to fall significantly again. As a result, it is likely to remain difficult for market participants betting on a weaker US Dollar.