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Has the Dollar Topped Out?

The U.S. dollar’s pullback in recent days is prompting speculation about whether the currency may soon plateau. Still, few are ready to say the dollar’s record-smashing rise is over.

By Mary Biekert & Matthew Burgess | September 13, 2022 at 01:09 PM
Photo: U.S. dollars banknotes at the Ninja Money Exchange, operated by Interbank HD, in the Shinjuku district of Tokyo, Japan, on June 9, 2022. Photographer: Toru Hanai/Bloomberg U.S. dollar banknotes at the Ninja Money Exchange, operated by Interbank HD, in the Shinjuku district of Tokyo, Japan, on June 9, 2022. Photographer: Toru Hanai/Bloomberg

The U.S. dollar’s pullback in recent days is prompting speculation about whether the currency’s march higher is coming to an end. Still, there’s a reluctance to write it off just yet.

After surging by more than 10 percent this year, the Bloomberg’s dollar gauge has dropped about 2 percent from last week’s high, even as bets on how far the Federal Reserve will raise interest rates have nudged up. A key focus now is U.S. inflation data due Tuesday. While a weak number may see traders trim rate-hike bets, that might not spell doom for the dollar given its haven appeal and a still-hawkish Fed.

“We’re reaching another point of people arguing ‘peak dollar, peak dollar, peak dollar—and it’s about to turn,’ ” Paul Mackel, head of global foreign-exchange research at HSBC Holdings Plc in Hong Kong, said on Bloomberg Television. “Personally, I think it’s too early. It’s going to persist for awhile yet. The underlying conditions for that change in the dollar’s direction aren’t there.”

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