Wells Fargo: The dollar has entered a long-term depreciation period

Gold Ten Data, February 9th, economists at Wells Fargo expect the dollar to be weaker than ever and have entered a long period of depreciation.

Given more resilient global growth and the hawkish turn of some foreign central banks (notably the ECB and BOJ) in recent months, we believe the USD has entered a prolonged period of depreciation. In the short-term, we expect the dollar’s depreciation to be gradual as the U.S. economy slips into recession, while the Fed is reluctant to cut rates prematurely.

We expect an accelerated depreciation of the dollar in 2024 on the belief that the Fed will start cutting rates sooner than foreign central banks.