Investors typically assess the strength of the U.S. dollar (USD) through a Federal Reserve-centric lens. The dollar’s exceptional strength against a broad basket of currencies has clearly benefited from seven rate hikes last year that took the Fed’s target federal funds rate to its highest level in 15 years. As the Fed continues its fight to bring down inflation in the U.S., we expect it will hike rates again at its next meeting on 1 February, and again in the first quarter of 2023, before pausing. While higher yields clearly worked in the dollar’s favor last year, any forward-looking view must also take into account ... (full story)