There are two reasons why analysts at Barclays expect the U.S. dollar uptrend to slow down. “Firstly, the USD rally may have a more disinflationary impact on the US economy,” they said in a report released Wednesday. “Given our view that the USD appreciation is likely to come primarily from outside Asia, mainly from a weaker EUR and EMEA FX, we may see a more significant pass-through from a stronger USD into US inflation this time around,” they added. Secondly, the analyst said the world should continue to benefit from cheap liquidity for years to come, using the European Central Bank’s easing measures as an example, which could hurt the dollar.
