After a two-month hiatus, the dollar rally looks set to resume and it could be powerful. Since last week, the dollar index has gained nearly 2 percent. But its surge since Friday has some strategists thinking the greenback may have turned and will start leading again, fueled by the prospect of Fed rate hikes.
“I think the markets are rushing to get long dollars again, and I think the FX market is running ahead of rates again,” said Vassili Serebriakov, BNP Paribas currency strategist. “It’s a little bit of a concern, in that I think we need support from higher rates to keep the dollar moving higher. But just about now, I think it’s about getting off the sidelines to get back into the long dollar trade.”
Serebriakov and other strategists said the dollar’s course could be determined in the next several days by a number of important events, not the least of which will be the May employment report June 5.
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