USD loses its advantages. Forecast as of 08.11.2022

Weekly US dollar fundamental forecast
The maturity phase is characteristic not only of economic and monetary but also of life cycles. People become calmer, and their reaction becomes less violent. With the Fed's monetary tightening slowing down, news that a few weeks ago would have led to a serious USD strengthening is now perceived as insignificant. More shocks are needed for the USD index rally, not pleasant surprises from the economic calendar. The EURUSD downtrend has entered the stage of maturity, which means there will be a reversal soon.

The 12% decline of the euro against the US dollar since the beginning of the year has several reasons. Firstly, the higher rate of the Fed's monetary restriction compared to the ECB. Secondly, the flight of investors to safe-haven assets due to the deteriorating global risk appetite. Thirdly, the proximity of a recession in the eurozone against the background of the energy crisis. These drivers are starting to falter to the disappointment of EURUSD bears.

Dynamics of eurozone inflation

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