- June 11, 2021
- Posted by: Stratford Team
- Category: Economy
Having fallen back to near its post-pandemic lows, economists at Capital Economics don’t think that the decline in the US dollar will continue. They explain why instead the dollar is expected to strengthen against most currencies over the next 12-18 months.
US government bond yields there will generally rise faster than those elsewhere
“We continue to think that the yields of government bonds will rise more in the US than elsewhere over the next few quarters and that this will push the dollar higher against most currencies.”
“We forecast a relatively uneven global economic recovery in which the US economy outperforms thanks to its significantly larger policy stimulus. That is in contrast to the two major economic downturns, when the US economy lagged behind its peers in Europe and Asia.”
“We expect activity in China to slow due to the withdrawal of policy stimulus and fading export growth, pushing the renminbi lower…