The trade-weighted US Dollar index has suffered its worst monthly depreciation since 2009. Economists at the National Bank of Canada believe that the greenback could recover some ground in the near term before sustaining a prolonged decline next year.

US Dollar appears oversold

“The US Dollar appears oversold and we would expect a partial retracement in the coming weeks.”

“Looking ahead to next year, we still anticipate a policy change from the FOMC in the first quarter of 2023, which would set the stage for a more prolonged decline in the greenback.”