There is No Sustainable Strength in the USD at the Present Time - Commerzbank

Commerzbank is the leading bank for the German Mittelstand and a strong partner for around 26,000 corporate client groups and just under 11 million private and small-business customers in Germany. As market expectations regarding US key rates have moved upwards, Commerzbank's economists examine the outlook for the USD and discuss what could have been.

In their projections of how interest rates will move in the future, both the market and the FOMC largely agree

The market and the FOMC are generally in agreement on the projections of the future path of interest rates for the first time in recent memory. There was no movement by the FOMC, but rather by the market. The market shifted its expectations on interest rates to the upside, not the FOMC. There are all things that are in favor of the US dollar.

We believe that if the new view on the Fed was accepted, the current strength of the Dollar would be considered to be sustainable. However, we don't have that information. The Fed watchers continue to predict that there will be no further hikes in interest rates. Because of this, we are expecting that there will not be a sustainable strength in the USD in the foreseeable future.