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Here’s what’s threatening the dollar in 2018

December 4, 2017

After a less-than-stellar 2017 performance, marked by a 9% drop against its main rivals, some hope that the U.S. dollar will return to strength in the new year, but there is plenty to rain on this parade.

On the one hand, interest-rate differentials between the U.S., where the Federal Reserve is tightening monetary policy, and other developed markets, in which central banks have further to go, should support the dollar going forward. After all the Fed’s “dot plots” suggest up to three rate hikes in 2018, while the European Central Bank is still busy tapering its bond purchases and the Bank of Japan is yet to make any official move.

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