The winning rally of the dollar continues and it seems that the greenback is not getting weak

Despite the fact that previously many experts predicted a weakening of the greenback, the dollar has strengthened against its main competitors by almost 2% since the beginning of this year.


On the eve of the USD index, it rose above the level of 98 points, reaching peak values from May 2017.

"The US has the most dynamic economy. Therefore, when investors see weak data around the world, they look to the dollar, "said Axel Merck, president of Merk Investments.

According to Commerzbank currency strategist Thu Lan Nguyen, the United States now looks like an oasis because it seems that the country's economy is not connected with the rest of the world.

The weak economic performance of the eurozone makes the ECB be even more cautious than the Fed, which announced its intention to "show patience" in the matter of monetary policy. At the same time, the Bank of Canada recognizes that "soft" monetary policy is still in demand. The position of the Central Bank of Australia is also shifting to the "dovish" side. In turn, the Bank of Japan intends to keep the interest rates low at least until next spring.


It should be noted that the yield on 10-year US Treasury securities is about 2.5% and this is the highest rate among developed countries. Similar securities of Canada and Australia are traded with a yield of less than 2% while in Germany and Japan, the indicator is in negative territory.

"When investors see that something is wrong in the world, they usually go to buy US Treasury bonds. Now a lot of things are brewing and the inflow of investments in dollar bonds is not weakening, "said Thomas Vacker from UBS Global Wealth Management.

According to experts, the US currency can still update its best levels, since investors are positive about the data on US GDP for the first quarter, which will be published tomorrow. According to forecasts, the economic growth of the world's largest economy will be 2.2%.

The material has been provided by InstaForex Company -