Trade-war angst has put pressure on the greenback this year. Wall Street thinks it’s about to get worse.
Dollar daze
The outlook for the U.S. economy is continuing to deteriorate: On Tuesday, the Organization for Economic Cooperation and Development cut its growth forecast over heightened trade war concerns.
President Trump’s tariffs are expected to sock most countries this year and next, the O.E.C.D. said. But the hit to the United States is especially spooking economists and Wall Street, who worry about lower growth colliding with a Republican spending bill that packs big tax cuts — and gargantuan deficits, reports Bernhard Warner.
All of that is putting pressure on the dollar. It traded near a three-year low on Monday, as global investors weigh keeping their money invested in America.
The greenback could fall further. Analysts at Morgan Stanley see it tumbling about another 9 percent over the next 12 months, and JPMorgan Chase and Goldman Sachs have also made bearish calls in the past week.
Investors may not be ready to ditch the world’s reserve currency. But they are increasingly hedging their bets against U.S. assets, especially Treasury notes and bonds — which could hurt the dollar, Matthew Hornbach, global head of macro strategy at Morgan Stanley, told Bloomberg Television on Monday.
