Amar Bashir

The US dollar is negative long-term because interest rate differentials will narrow, US fiscal dynamics are poor, policy uncertainty and tariffs persist, and broad positive risk sentiment will lift emerging markets. The dollar is overpriced, and short positions should be focused on emerging market currencies, which benefit in a global growth and risk-on environment.

The US-Iran peace deal reduces oil prices and inflation, removing the need for further rate hikes by major central banks like the Fed and Bank of England. The bond market is still pricing about 30–35 basis points of hikes over the next year, which is too aggressive. The Fed under new chair Kevin Warsh may avoid hiking, and the Bank of England has already tightened financial conditions by pricing out cuts. U.S. and UK government bonds are attractive because rate hike expectations should be faded.