There has not been a day when a new analyst has not predicted the end of a dollar era. For instance, Kit Juckes, a currency strategist at Societe Generale, expects the US dollar to fall against some currencies to the lows last seen near the end of 2020.
A steep decline may occur if the Fed cuts the key rate. The prospects of lower interest rates make a currency less attractive to investors who seek higher yields."As was the case in January/February before the SVB mini-crisis, the market is anticipating a peak in US rates and a further narrowing relative rates. If nothing happens to scupper those expectations (another upside surprise in US growth, or further European growth disappointment) I would expect the Dollar Index to closer but not all the way to, the lows at the end of 2020," Kit Juckes wrote in the note.
He also believes that the currency's troubles may be far from over. They are likely to adversely affect the asset in the future. Since the end of 2022, the US dollar has lost 13% against a basket of six major currencies: the euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc. The nosedive comes as inflation is rapidly cooling, fueling hopes that the Fed could soon stop raising interest rates or even start cutting them.