Despite the U.S. dollar’s robust rise over the past few months, there are some signs that this rally might be fading.
Wells Fargo currency strategist Nick Bennenbroek lays out his main thesis in an interview with CNBC, saying the U.S. is well ahead in terms of growth and they’re doing extremely well.
“Eventually, these foreign economies I think are going to catch up and some of this fiscal stimulus will eventually fade, so that gap’s going to close and these foreign currencies are going to strengthen over time,” Bennenbroek said.
On Monday, U.S. President Donald Trump announced that he had closed a trade deal with Mexico to replace NAFTA. News of the deal helped fuel the Mexican peso’s nearly 2% rise this week against the dollar. The Canadian dollar also advanced this week, although reports indicate that a U.S.-Canada deal has not yet been finalized, despite Canada’s aim to arrive at a deal by the end of Friday.