A strong Dollar rally beyond one or two cents is unlikely – Commerzbank

The US Dollar (USD) preserves its strength against its major rivals. Nonetheless, a strong Dollar rally beyond one or two cents is unlikely, in the view of economists at Commerzbank.

The development of inflation is difficult to predict and to evaluate

“In case of a small fall in prices and continued decent economic data (we will see a bunch of releases for the rest of this week) the US Dollar might be able to appreciate a little until then as the market might adjust its expectations again.”

“Even the Fed is just driving at sight and is waiting for more data as the development of inflation is difficult to predict and to evaluate.” 

“A strong Dollar rally beyond one or two cents is unlikely though, as the market will at some point look ahead beyond the peak of the rate cycle. After all, what goes up quickly might easily fall just as quickly afterward.”