Market Outlook: A Minor Correction in the Dollar Possible, Yet the Outlook Remains Positive

Forex - Swissquote Bank reported that the US dollar continues to strengthen as investors continue to bet on higher inflation during the selected presidency of Trump. The dollar softened briefly after US inflation data aligned with expectations yesterday. However, Swissquote Bank analyst Ipek Özkardeskaya stated that inflation is expected to accelerate due to Trump’s proposed growth-friendly policies and tariffs, and the dollar has recovered since then. Özkardeskaya emphasized that the dollar is “clearly in overbought territory” and that while a small correction is possible, the outlook for the currency remains positive due to increasing doubts about the Fed's ability to continue lowering interest rates. The DXY dollar index rose by 0.1% to 106.601 after reaching a one-year high of 106.775.