UBS again predicts dollar decline due to Sino-American relations

A unit of USB Group AG for the second time over the last two months reduced the dollar forecast, referring to the dependence of the currency on the dynamic of Sino-American trade relationship. 

USB Investment Bank’s spokesmen Shahab Jalinoos, Alvise Marino and Vassili Serebriakov pointed out the negative influence of Donald Trump’s trade policy on capital flows into the US. For this reason, many investors strengthened their forecasts for other currencies, most notably — for the euro and yen. 

The Bloomberg Dollar Spot Index, fallen about 6% this year, reached its lowest rate since December 2023 earlier this week. It was mostly influenced by Trump’s threats to fire Federal Reserve System chairman Jerome Powell, raising questions of the central bank's independence. 

On Wednesday, the dollar rate increased 0.4% after news on US tariff mitigations for China. Meanwhile, Trump’s position regarding Powell became restrained. As the president has stated, he has no intention of resigning the central bank governor. 

In turn, Credit Agricole chief currency strategist Valentin Marinov suggested that the dollar may soon recover its positions on the market.