The decade-long bull market in the US Dollar may be leveling off, but economists at Charles Schwab do not anticipate a major bear market in 2023.

Further narrowing in the yield gap in early 2023

“For the Dollar in 2023, we look for further downside in the near term, but expect it to stabilize by mid-year.”

“With the pace of Fed tightening likely to slow, the Dollar has room to retreat further in early 2023 should central bank policies become more aligned.”

“A reasonable target would be the average of the range that prevailed prior to the pandemic, or about 3% to 5% lower.”