{"id":212611,"date":"2021-03-27T15:32:00","date_gmt":"2021-03-27T12:32:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-the-u-s-dollar-continues-to-rise-defying-a-2021-consensus-trade\/"},"modified":"2021-03-27T15:32:00","modified_gmt":"2021-03-27T12:32:00","slug":"why-the-u-s-dollar-continues-to-rise-defying-a-2021-consensus-trade","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-the-u-s-dollar-continues-to-rise-defying-a-2021-consensus-trade\/","title":{"rendered":"#\n  Why the U.S. dollar continues to rise, defying a 2021 consensus trade"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3b180775430\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3b180775430\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-u-s-dollar-continues-to-rise-defying-a-2021-consensus-trade\/#Euro_trades_at_year-to-date_low_versus_dollar_as_COVID_cases_force_renewed_Europe_lockdowns\" >Euro trades at year-to-date low versus dollar as COVID cases force renewed Europe lockdowns<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-u-s-dollar-continues-to-rise-defying-a-2021-consensus-trade\/#William_Watts\" >William Watts<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Why the U.S. dollar continues to rise, defying a 2021 consensus trade<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Euro_trades_at_year-to-date_low_versus_dollar_as_COVID_cases_force_renewed_Europe_lockdowns\"><\/span>\n  Euro trades at year-to-date low versus dollar as COVID cases force renewed Europe lockdowns<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000211160\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        renoImageFormat-\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:64.921875%;\" data-mobile-ratio=\"64.921875%\" data-layout-ratio=\"64.921875%\" data-subtype=\"\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-316633?width=140&amp;size=1.5403128760529483 140w,\nhttps:\/\/images.mktw.net\/im-316633?width=540&amp;size=1.5403128760529483 540w,\nhttps:\/\/images.mktw.net\/im-316633?width=620&amp;size=1.5403128760529483 620w,\nhttps:\/\/images.mktw.net\/im-316633?width=700&amp;size=1.5403128760529483 700w,\nhttps:\/\/images.mktw.net\/im-316633?width=860&amp;size=1.5403128760529483 860w,\nhttps:\/\/images.mktw.net\/im-316633?width=1260&amp;size=1.5403128760529483 1260w\" sizes=\"(max-width: 140px) 100px,\n(max-width: 540px) 500px,\n(max-width: 620px) 580px,\n(max-width: 700px) 660px,\n(max-width: 860px) 820px,\n1260px\" src=\"https:\/\/images.mktw.net\/im-316633?width=620&amp;size=1.5403128760529483\" data-enlarge=\"https:\/\/images.mktw.net\/im-316633?width=1260&amp;size=1.5403128760529483\" alt=\"\" title=\"\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\"><span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            Mark Wilson\/Getty Images<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/div>\n<p>       The U.S. dollar didn\u2019t get the memo.<\/p>\n<p> A weaker U.S. dollar, courtesy of trillions of dollars in fiscal stimulus, a dovish Federal Reserve committed to letting the economy and inflation run hot, rising public debt and twin government budget and international trade deficits, was the consensus call coming into 2021. <\/p>\n<div class=\"paywall\">\n       Instead, the U.S. currency has <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>reciated versus major rivals as the first quarter comes to a close, with the euro<br \/>\n        EURUSD,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210561242\/realtime\/sampled\" class=\"positive\">+0.27%<\/bg-quote><br \/>\n       falling to a year-to-date low on Thursday, trading near $1.1775. The ICE U.S. Dollar Index<br \/>\n        DXY,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598269\/delayed\" class=\"positive\">+0.21%<\/bg-quote><span>,<\/span><br \/>\n       a measure of the currency against six major rivals, rose to a more-than-four-month high at 92.92 on Thursday and has bounced 3.2% so far this year after 2020\u2019s 6.7% decline.<\/p>\n<p>The dollar\u2019s unexpected resilience has implications for other assets. A weaker dollar was seen as a boon for U.S. equities and, even more so, for international stocks. A weaker dollar was also expected to help provide a lift for emerging markets. It was also expected to provide a tailwind for booming commodities.<\/p>\n<p>So why is the dollar rising instead? At the top of the list, analysts said, was Europe\u2019s struggles with rolling out COVID-19 vaccines. A rise in infections and new and extended business lockdowns in several European countries are weighing on economic growth expectations for the eurozone, translating into weakness for the formerly robust euro.<\/p>\n<p>\u201cThe dramatic divergence of European and U.S. growth expectations is a legacy of poor management on this side of the Atlantic and will leave scars in market pricing,\u201d said Kit Juckes, a London-based macro strategist with Soci\u00e9t\u00e9 G\u00e9n\u00e9rale, in a note.<\/p>\n<p>\u201cConsensus forecasts look for 2021 eurozone GDP growth to be 1.5% slower than in the U.S., a relative deterioration of 3% since last September and 2.2% since the end of 2020. That gap needs to stop widening, at the very least, before it\u2019s safe to sell the dollar again,\u201d Juckes wrote.<\/p>\n<p>Meanwhile, a robust U.S. economic performance could mean divergence in monetary policy, with the Fed set to begin tightening monetary policy relatively more quickly than the European Central Bank. That could see the pace of dollar appreciation accelerate this year, wrote analysts John Shin, Ben Randol and Athanasios Vamvakidis of BofA Global Research, in a Tuesday note.<\/p>\n<p>A sharp pullback by global stocks and other assets viewed as risky would likely add to dollar strength, given the currency\u2019s traditional role as a haven during periods of financial market volatility, the analysts said.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>\u201cBuoyant global risk appetite, rising expectations for global recovery and Fed complacency pose the greatest risks to our constructive USD view,\u201d they said. \u201cThe Fed has been much more effective in its communication than the ECB, keeping the USD down despite a much worse eurozone economic outlook.\u201d<\/p>\n<p>Meanwhile, the dollar\u2019s relationship with global equites and other developed market currencies has changed, said Oliver Allen, markets economist at Capital Economics, in a note.<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        renoImageFormat-\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:69.921875%;\" data-mobile-ratio=\"69.921875%\" data-layout-ratio=\"69.921875%\" data-subtype=\"\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-316626?width=140&amp;size=1.4301675977653632 140w,\nhttps:\/\/images.mktw.net\/im-316626?width=540&amp;size=1.4301675977653632 540w,\nhttps:\/\/images.mktw.net\/im-316626?width=620&amp;size=1.4301675977653632 620w,\nhttps:\/\/images.mktw.net\/im-316626?width=700&amp;size=1.4301675977653632 700w,\nhttps:\/\/images.mktw.net\/im-316626?width=860&amp;size=1.4301675977653632 860w,\nhttps:\/\/images.mktw.net\/im-316626?width=1260&amp;size=1.4301675977653632 1260w\" sizes=\"(max-width: 140px) 100px,\n(max-width: 540px) 500px,\n(max-width: 620px) 580px,\n(max-width: 700px) 660px,\n(max-width: 860px) 820px,\n1260px\" src=\"https:\/\/images.mktw.net\/im-316626?width=620&amp;size=1.4301675977653632\" data-enlarge=\"https:\/\/images.mktw.net\/im-316626?width=1260&amp;size=1.4301675977653632\" alt=\"\" title=\"\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\"><span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            Capital Economics<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/div>\n<p>       For much of the pandemic, there was a relatively strong relationship, with a weaker dollar translating into stronger global equities (see chart above). That occurred as central banks across the developed world cut policy interest rates to what they considered the effective lower bound and pledged to keep them there for some time, which meant relative moves in interest-rate expectations were fairly small, Allen explained. As a result, investor appetite for risk, which tended to mean a weaker dollar, became the main driver of developed market exchange rates.<\/p>\n<p>The relationship started to break down at the beginning of this year, however, as the dollar took back some ground even as global stock markets continued to climb, Allen noted. While risk appetite has probably continued to influence developed-market currencies, it\u2019s been overwhelmed by the surge in U.S. bond yields, which have been sharper than elsewhere, he said.<\/p>\n<p>Capital Economics expects the dollar to strengthen against the yen and euro because bond yields in Japan and the eurozone have the least scope to rise.<\/p>\n<p>\u201cPolicy makers there appear less willing to accept higher long-term yields and, in the case of the eurozone especially, we think that economic recoveries could underwhelm,\u201d Allen said.<\/p>\n<\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"William Watts\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"William_Watts\"><\/span>William Watts<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D338D8DE1390%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Why the U.S. dollar continues to rise, defying a 2021 consensus trade &#8221; Euro trades at year-to-date low versus dollar as COVID cases force renewed Europe lockdowns Mark Wilson\/Getty Images The U.S. dollar didn\u2019t get the memo. A weaker U.S. dollar, courtesy of trillions of dollars in fiscal stimulus, a dovish Federal Reserve committed&#8230;<\/p>\n","protected":false},"author":1,"featured_media":212612,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-212611","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/212611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=212611"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/212611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/212612"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=212611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=212611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=212611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}