Investing.com — The will possible proceed to outmuscle its G10 rivals within the months forward, supported by financial power, earlier than turning decrease within the again half of 2025 as buyers reassess the election impression and the Fed delivers extra fee cuts, analysts from BofA mentioned in a latest observe.

“We’re first on the lookout for continued greenback assist for the subsequent a number of months on again of ongoing financial outperformance within the US, as we await additional readability from Washington on quite a few anticipated coverage modifications,” BofA analysts famous. 

The greenback’s trajectory is prone to shift within the latter half of 2025 because the increase from the pricing in a pro-growth economic system underneath a second Donald Trump administration runs out of street. “Additional out, nonetheless, we see USD power finally beginning to average this 12 months as effectively,” the analysts mentioned.

They anticipate the greenback to weaken because the market has already priced in expectations for maximalist financial coverage bulletins, whereas many development implications usually are not but factored in.

Whereas the “US exceptionalism” narrative has pushed greenback power, there’s scope for normalization as Washington gives extra readability on insurance policies, they added.

The analysts’ name for the greenback to melt is based on a softer touchdown for the U.S. economic system subsequent 12 months, with situations paving the best way for additional Fed cuts. The analysts anticipate  this to finally “jumpstart” a moderation in greenback power in the course of the second half of 2025, after buying and selling near present ranges by way of mid-year.