Despite high US debt levels, with the Federal Reserve accelerating its tapering of bond purchases economists at UBS expect dollar appreciation to continue in 2022, as investors focus on divergent central bank policies.
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“We expect the US dollar to strengthen further in the year ahead as the Fed withdraws monetary accommodation faster than some other major central banks.”
“We hold a positive view on oil as demand hits new highs, and a negative view on gold against a backdrop of rising rates and a belief that inflation will fall.”
“While mindful of risks around COVID-19 variants and inflation, we keep a positive outlook on stocks for the start of 2022. Global economic growth is likely to remain above trend for the first half of 2022, monetary policy is still accommodative, even if emergency support measures are being scaled back, and we expect 10% growth in global corporate earnings in the year ahead.”