Four reasons why USD's current carry advantage is set to transition into a headwind – BofA
Source Fxstreet
Economists at the Bank of America analyze the potential shift from the US Dollar's (USD) carry advantage to a significant headwind.
Challenging period ahead for the USD
The Fed is predicted to be one of the initial G10 central banks to reduce rates, challenging the USD's carry advantage.
Given the higher starting point of US rates, their potential reduction could significantly narrow the rate differentials with other currencies, diminishing the USD's attractiveness.
The USD stands as one of the most overvalued currencies in the G10, a factor that could amplify its vulnerability in a rate-cutting environment.
Lower interest rates in the US typically boost global risk appetite, a dynamic that historically benefits currencies other than the USD.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
Kevin Hassett is now backing out of the race to lead the Federal Reserve, and Trump doesn’t seem to mind.Kevin Hassett is now backing out of the race to lead the Federal Reserve, and Trump doesn’t seem to mind. The White House economic adviser said on Fox News’ The Sunday Briefing that he and the president have been talking “from the beginning” about whether he’d be more useful staying in the West Wing or […]
Kevin Hassett is now backing out of the race to lead the Federal Reserve, and Trump doesn’t seem to mind. The White House economic adviser said on Fox News’ The Sunday Briefing that he and the president have been talking “from the beginning” about whether he’d be more useful staying in the West Wing or […]
TradingKey - A significant drop in rate cut expectations and liquidity depletion, among other factors, have triggered a cryptocurrency plunge; Bitcoin may briefly fall to $90,000.On Monday (January 19
Meme Coins Price Prediction: DOGE, SHIB and PEPE tumble with Bitcoin, as support levels come into focusDOGE, SHIB and PEPE extend Monday losses as BTC drops below $93,000; DOGE stays under $0.1375/$0.1417 EMAs, SHIB eyes $0.00000678 support, and PEPE risks a slide below $0.00000500 toward $0.00000363.
DOGE, SHIB and PEPE extend Monday losses as BTC drops below $93,000; DOGE stays under $0.1375/$0.1417 EMAs, SHIB eyes $0.00000678 support, and PEPE risks a slide below $0.00000500 toward $0.00000363.
Gold Price Forecast: XAU/USD surges to all-time high above $4,650 amid Greenland tariff threatsGold price (XAU/USD) rises to a fresh record high near $4,675 during the early Asian session on Monday. The precious metal gains momentum after US President Donald Trump said he would slap tariffs on eight European nations that have opposed his plan to take Greenland.
Gold price (XAU/USD) rises to a fresh record high near $4,675 during the early Asian session on Monday. The precious metal gains momentum after US President Donald Trump said he would slap tariffs on eight European nations that have opposed his plan to take Greenland.
The crypto market structure bill has encountered opposition led by Coinbase and is currently stalled, but it is expected to eventually pass and propel the crypto market forward.According
Related Instrument
