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29/05/24
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JPMorgan Forecasts Dollar Price For 2024
On Wednesday, JPMorgan released its latest forecast for the U.S. dollar. Analysts at the bank evaluated various geopolitical developments and economic forces that they expect will affect the dollar’s trajectory.
JPMorgan’s medium-term view of the U.S. dollar is still bullish based on supporting factors including, its growth cushion, and high yields.
The bank did however say that there were tactical concerns due to saturated investor longs and nascent indications of fading US growth exceptionalism.
Analysts say as central banks were inflation, rather than growth-focused, inflation divergences would be key. Although effects from US inflation prints were obvious for the Fed pricing direction, they were more nuanced for the dollar. The bank noted that DXY had been more sensitive to inflation misses.
JPMorgan underlined that two factors that drove the U.S. dollar’s bullishness were the currency’s persistent US exceptionalism and its carry advantage even though it was a defensive currency.
The bank noted that although the carry advantage remained intact, the persistent US exceptionalism seemed to be in the early stages of losing its luster.
The bank added that it was wary of the tactical risks and has in the past week recommended reducing USD length tactically, although maintaining long USD exposure via options.
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