Post-election dollar strength could stay for now - UBS
Main U.S. stock indexes modestly red; Dow off ~0.3%
Industrials weakest S&P sector; Tech leads gainers
Dollar up; bitcoin up ~1%; gold, crude slip
U.S. 10-Year Treasury yield falls to ~4.41%
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POST-ELECTION DOLLAR STRENGTH COULD STAY FOR NOW - UBS
UBS's global wealth management team in a note Thursday says that strength in the dollar following last week's U.S. elections and Republican Donald Trump's win as U.S. president could continue, at least in the short term.
The team writes that while Trump's policy agenda is still subject to uncertainty, the short-term positive impact on the dollar "looks more assured."
"New tax cuts would make US investments attractive to foreigners," the team notes.
"The threat of tariffs and higher yields should both boost the appeal of the dollar. We now anticipate the USD is likely to stay in overvalued territory for some time, and have adjusted our broader currency forecasts to reflect this."
The team adds that it's not yet clear how Trump's policies will be funded over the medium term.
"We must also remember the President-elect’s stated desire for both lower interest rates and a weaker dollar," the team notes.
The U.S. dollar index =USD, which measures the currency against six top counterparts, was last up 0.1% on Thursday, and earlier reached its highest since early November 2023.
(Caroline Valetkevitch)
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