USD Bull Market Rally Regains Momentum into 2017
January 24, 2017
The US dollar (USD) bull market entered its fourth consecutive year in 2016, but a key driving factor—monetary policy divergence that underpinned the rally—was losing its potency. There are three factors that, in our view, will fuel the USD rally in 2017: fiscal stimulus proposal, US rate normalization and idiosyncratic factors. The degree to which these factors materialize will determine the intensity of USD strength. We believe factors are aligning for the USD rally to enter its fifth consecutive year, a potentially significant one.