It’s too early to call an end to the dollar rally - JP Morgan

Bloomberg reports comments from Tai Hui, a Global Market Strategist at JP Morgan Asset Management in Hong Kong, as he says that this year’s US dollar rally is not yet over.

It’s worth noting that the US currency has gained more than 6% from this year’s low of 88.25 reached in February thanks to an expanding US economy and haven bids amid trade tensions.

Key Quotes:

“It may be premature to call this the end of the USD rally.” 

“The greenback has been on a rapid ascent in recent months due to reduced risk appetite and outperformance in U.S. economic growth and equity performance.”

“Speculative positioning is at its highest since 2017.” 

“This doesn’t imply imminent correction but this technical factor does suggest limited room for more appreciation.”

“At the same time, the U.S. economy is running a sizeable current-account deficit, which needs the dollar to weaken to rebalance.”