Dollar set to feel the squeeze against euro

Even if the dollar continues to rise against emerging markets currencies, further gains against the euro may prove difficult, writes Oliver Mangan

At the start of the year, we took the view that while the US dollar was in long-term decline, it would likely enjoy periods of strength during 2018.

The basis of this view was that the extreme short positions built up against the US currency in foreign exchange markets could well unwind, while President Trump’s cuts in US corporate taxes were likely to trigger dollar inflows as funds were repatriated by large corporates to the US.