Wells Fargo forecasts dollar strength in second quarter

Wells Fargo analysts expect the US dollar to strengthen in the second quarter of this year, which, in their opinion, will lead to a decline in the EUR/USD rate to 1.10 by the end of this period.

The forecast is based on a number of factors, including the potential reduction in trade policy uncertainty and the attractiveness of US assets to global investors.

After a period of consolidation around 1.11 at the end of the year, Wells Fargo forecasts a further decline in EUR/USD to 1.08 in the third quarter of 2026.

Key factors supporting wells Fargo's Forecast:

  • Reducing trade policy uncertainty: Банк видит перспективы для заключения торговых сделок между зарубежными правительствами и администрацией США, а также для некоторых уступок со стороны Дональда Трампа в торговых секторах. Это, по мнению аналитиков, снизит неопределенность и повысит предсказуемость, что уменьшит давление на продажу доллара.
  • Attractiveness of American assets:Wells Fargo believes global investors can take advantage of more attractive prices to buy US assets and US currencies. This is due to the fact that the dollar, according to the bank, will maintain its position and resist structural capital outflow.
  • Divergence in monetary policy:The bank expects further interest rate cuts by global central banks, while the Federal Reserve will remain cautious for now. This yield spread, according to Wells Fargo, will continue to support the dollar.

Fed interest rate forecast:

Wells Fargo expects the Fed to cut interest rates in the second half of 2025. This, according to the bank, will limit the possibilities for further growth of the dollar. However, analysts predict a resumption of dollar growth in 2026, when US bond yields begin to rise again.

Influence on the market:

Wells Fargo's forecast suggests the dollar will remain strong in the coming quarters, which could weigh on other currencies, especially the euro. Investors should consider these forecasts when making decisions regarding foreign exchange transactions and investments in U.S. dollar-denominated assets.

Important to note:

Прогнозы являются лишь оценками и подвержены изменениям в зависимости от развития экономической ситуации и геополитических факторов. Инвесторам следует проводить собственное исследование и консультироваться с финансовыми консультантами, прежде чем принимать какие-либо инвестиционные решения.

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