Bullish indicating open at $55-$60, IPO prices at $37
Investing.com -- Deutsche Bank (ETR:DBKGn) analysts have revised their outlook on the U.S. dollar, predicting the start of a major downtrend for the currency. This shift in perspective is attributed to a series of significant policy changes across the globe.
The bank cited the most substantial alteration in US trade policy in a century, a pivotal change in German fiscal policy since the country’s reunification, and a major reassessment of US geopolitical leadership since World War II as key factors influencing their forecast.
Deutsche Bank’s prognosis includes an end to the "higher for longer" dollar narrative, with an expectation for the EUR/USD exchange rate to appreciate towards a purchasing power parity of 1.30 over the remainder of the decade.
This outlook is based on several assessments, including a diminishing inclination from the international community to finance the US’s growing twin deficits, a peak followed by a gradual decrease in elevated US asset holdings, and a stronger propensity to utilize domestic fiscal space to bolster growth and consumption outside of the US.
The bank’s analysts also pointed to the current climate of extreme uncertainty and rapidly evolving policy norms, acknowledging the high risk of market dislocations and regime breaks. In their report, they discuss potential market disruptions and emphasize their willingness to remain open-minded and adjust their forecasts in response to the scale of policy shifts.
Deutsche Bank’s analysis reflects a comprehensive review of global economic and political developments and their impact on the US dollar. The bank’s new stance signals a significant departure from previous expectations for the currency, suggesting a transformative period ahead for currency markets.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.