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    Dollar rally isn’t over - SocGen Sandeep Kanihama

    Kit Juckes, Research Analyst at Societe Generale, suggests that the US dollar hasn’t been the weakest of the G10 currencies in the six months.Key Quotes“The dollar has also outperformed the Mexican peso and Chinese yuan. Yet again, during the six months after the first Fed rate hike in a cycle, the dollar has weakened.‘Buy the rumour, sell the fact’ is the wise response to the start of the Fed hiking cycle, but you can’t simply extrapolate this into the future, even if this is by far the most unusual Fed tightening in modern times.If the global economy doesn’t slide towards recession, the Fed will eventually raise rates (timidly), bond yields will crawl higher and monetary policy divergence will see the dollar gain. EUR/USD will drift down within its range (1.08 at end-year), and USD/JPY will drift up (to 114).”

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