U.S. dollar will begin a large-scale decline from mid-2023, according to Wells Fargo

Analysts at Wells Fargo believe that the U.S. dollar will remain strong in the first months of 2023. In the second half of the coming year, the U.S. currency is expected to decline. The weakening of the dollar from the middle of the next year can occur against the background of softening of the U.S. policy, which is predicted by most market participants. 

According to Wells Fargo experts, the strong U.S. dollar has been the main topic for almost the entire current year. Analysts' expectations are related to the fact that the dollar's strengthening trend will continue in the first months of the coming year. This is because economic trends in the United States remain stable, unlike the economies of other developed countries. By the end of the first three months of the coming year, the specialists expect to see a 4-5% growth in the U.S. dollar index. This may be due to the fact that the Federal Reserve plans to raise rates before the end of the first quarter of 2023, while a number of other leading central banks intend to complete their tightening cycles by then. 

Analysts also added that against the backdrop of the completion of the Fed's tightening cycle and the deterioration of economic trends in the country, the decline in the U.S. currency will be quite large-scale. In this regard, over the next year, most of the currencies of the G10 countries, along with the currencies of developing countries, are likely to strengthen against the U.S. dollar.