There is no need to doubt the U.S. dollar, according to Jamie McGeever at Reuters

According to Jamie McGeever, financial journalist at Reuters, news on the U.S. dollar’s decline might be strongly exaggerated.

The fact is that world stocks have managed to rebound significantly over the previous month, while the dollar along with bond yields have fallen. Consequently, many investors bet that the U.S. Federal Reserve (the Fed) creates the necessary conditions for the much-anticipated “pivot” of the American currency.

Major banks start to release their forecasts for the following year. Some of them, including HSBC and Morgan Stanley, outline that the dollar has reached its peak so far, and it will weaken in 2023.

However, not long ago the Fed’s officials strictly adhered to “hawkish” rhetoric, including former advocates of a softer monetary policy as Mary Daly, San Francisco Fed President. Regarding this, the dollar has every chance to resume its 2022 rally.

At the beginning of this week, markets might be guided by such events as Mary Daly’s speech, auctions of 2-year and 5-year U.S. Treasury bonds, release of data on PPI inflation in Germany.