Barclays: Dollar could fall further, but strong U.S. economic data will limit the decline

Analysts at Barclays said in a note that the dollar could fall further in the near term, although the decline could be limited given the relative resilience of the U.S. economy. Bond market volatility is creating an unfavorable environment for the dollar, while U.S. trade policy missteps, a shift in rhetoric around tariffs or weak data could further weaken the dollar. However, analysts do not expect the dollar to depreciate significantly. The recent tariff downgrade means the U.S. economy could suffer less than feared, they said. Beyond short-term unease about the U.S. budget deficit, Trump's fiscal easing plan is more likely to strengthen the dollar than his choice of fiscal austerity.