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2019 is nearly here, and that means it is time to roll out my ten predictions for the new year. As I did last year, I will start with number 10 and work our way up to number 1 over the last month of 2018. Enjoy!
Prediction #7 – The U.S. Dollar Will Weaken in 2019
With the Fed likely on hold in 2019 and U.S. Treasury yield likely heading lower (read prediction 10 and 8), the dollar is likely to see a significant weakening in 2019. The dollar has stopped rising since the beginning of November and has stalled out completely around 98 on the U.S. Dollar index.
A Steep Decline
Should yields fall, it likely to make currencies such as the yen and euro more attractive than the dollar. If the dollar does fall, it may result in the dollar retesting the lows of 2018 of around 88.
Trade Tensions
Another potential headwind for the dollar are the trade tensions between the U.S. and China. Investors are likely to seek safety in a currency such as the Yen should the trade war grow any worse. The yen could strengthen materially in 2018 and may even be heading back to 100 versus the dollar.
In all, it makes may likely mean that the dollar is heading lower and Prediction #7 for 2019.
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results
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dollar, euro, yen, weaken
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