The US dollar was able to gain across the board on Tuesday. Economists at Commerzbank believe that a fresh wave in dollar appreciation would not be justified.

Start of a new dollar rally?

“Long-term inflation expectations (5x5) are still stable, and there are no indications that the market expects rampant inflation as in the 1970s/80s as a result of the early rate cuts. Nevertheless, higher inflation in the long run also implies a less strong dollar – assuming that other central banks are more determined in their fight against inflation.”

“Currently, however, there are no signs that the Fed is taking a significantly different course compared with other central banks. Hence, a renewed surge in dollar appreciation would not be justified in our eyes.”