ANZ Bank: approaching end of USD dominance

The growth rate of the U.S. dollar has been driven by the pace and size of interest rate increases. According to economists at ANZ Bank, the dominance of the U.S. dollar is coming to the end.

Experts forecast the volatility of the currency to continue in 2023. This is indicated by synchronized global cycles of policy tightening and recession risks continue to pay off.

Economists say the U.S. currency peaked when the dollar index hit 114 in September after rising more than 20% since January. Subsequently, the U.S. dollar reversed amid growing fears of a U.S. recession and the energy crisis in Europe and Britain.

In the short term, there are opportunities for the dollar to consolidate. Analysts expect the dollar to look more attractive to investors as a safe haven asset due to the rising fear of recession. Besides, there are also hawkish surprises from the Fed, which are not currently reflected in the price.