BNPP MARKETS CALL:DOLLAR DOMINANCE:END IN SIGHT?

法国巴黎银行

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　　The combination of a strong US economy relative to the rest of the world and divergentcentral bank policies has been supportive for the dollar. We expect the trend to continue inthe near term.　　Over the medium term, we are not positive on the USD as we see some of the factors thathave supported the dollar eroding. The rate differential is likely to narrow with the expectedend of the Fed’s hiking cycle and the relative outperformance of US growth versus the rest of theworld is also likely to diminish once the fiscal impulse fades.　　Further weakening demand for US assets (in particular bonds) from international investors,coupled with a significant non-petroleum trade deficit is likely to cause the USD to weaken overthe medium term.