The US dollar’s strength has been broad-based lately. Economists at UBS expect additional USD strength in the coming weeks.

Fed’s faster policy normalization to keep US dollar supported

“Intensifying global growth concerns are likely to keep the USD on a stronger path than almost all currencies during 2Q.”

“The Federal Reserve's determination to act decisively to curb inflation should also keep the US dollar supported, particularly against the currencies of central banks like the European Central Bank that continue to lag in monetary tightening. Despite greater uncertainty, the yen is likely to stay weak due to the BoJ’s dovish monetary policy stance and deteriorating external balances.”

“Despite near-term weakness due to global growth concerns, commodity prices are likely to remain elevated, which should give commodity-exporting countries some leeway in their monetary policy and support their currencies.”

“We continue to expect more US dollar strength in the second quarter, and we have accordingly lowered our EUR/USD forecast for June to 1.05 (from 1.11 previously). Having said this, the case for USD strength in the second half of the year is certainly not set in stone. Whether there is additional USD strength or some reversal of fortune depends very much on a sequential global growth recovery in 3Q.”