DOLLAR POISED TO WEAKEN?

Many banks expect the dollar to weaken against other currencies this year. A weaker dollar would make U.S. goods cheaper in other countries, boost commodity prices at home, and buoy the stock price of mining, oil, and other companies that produce commodities.
The weakness would stem from the Fed’s continuing low interest rates, which make dollars a less attractive investment.
In the last quarter of 2019, the dollar’s value, as rated by the Wall Street Journal’s Dollar Index, dropped 1.9 percent from its September 2019 high.
During that same period, copper and U.S. crude oil futures rose 9 percent, and gold reached its highest price since 2013.
A cease-fire in the U.S.-China trade war also is pressuring commodity prices upward.
TREND FORECAST: The dollar remains strong, mostly as a result of central banks continuing to lower interest rates to boost their sagging economies, which in turn is devaluing their currencies.
While the general consensus on The Street is for the Fed not to lower interest rates, we maintain our forecast for negative to zero interest rate policy before the end of the year, which in turn will put downward pressure on the dollar.