USD: Arctic chill freezes greenback – NAB

National Bank of Canada (NAB) analysts Stéfane Marion and Kyle Dahms noted that the USD fell to its lowest level since 2023 due to geopolitical tensions and speculative positioning. They anticipate a near-term rebound from oversold levels but expect the Dollar to broadly weaken through 2026 as reflationary policies are pursued. The report highlights the implications of the recent Federal Reserve leadership change and ongoing inflation concerns.

Geopolitical tensions weigh on USD

"The Arctic chill that swept across the U.S. in January also froze the greenback, which fell to its lowest level since 2023 against a basket of 24 currencies."

"We would now anticipate a near-term rebound from oversold levels, but still see the dollar broadly weakening through 2026 as Washington pursues reflationary policies that are typically USD-negative."

"Notwithstanding these comments, the President surprised markets on January 29 by nominating Kevin Warsh to lead the Federal Reserve—a far less controversial choice than anticipated."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)