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“史诗级大涨”后,美元处于什么水平?

After the "epic surge," what level is the dollar at?

wallstreetcn ·  Jan 10 17:20

Bank of America noted that the nominal and real effective Exchange Rates of the dollar are currently at multi-decade highs and are significantly overvalued among G10 MMF. Looking ahead this year, the dollar Exchange Rates may display a trend of "strong at first and weak later." In the short term, driven by U.S. tariff policies, the dollar will remain strong, but as these policies harm the U.S. economy and the rest of the world responds accordingly, the dollar will weaken later this year.

Bank of America believes that after a recent surge, the nominal and real effective Exchange Rates of the dollar have reached decades-long highs and are severely overvalued among G10 MMFs. Looking ahead this year, the dollar Exchange Rates may exhibit a "high first, low later" diverging trend, with the specific path and timing depending on the details of USA policies.

In a Research Report dated January 8, Bank of America Analysts stated that the current dollar rising cycle began in mid-2011 and is the longest dollar appreciation period in recent decades.

Since the last year's USA election, the dollar Exchange Rates have strengthened further from their highs. After significant interest rate cuts in September, strong data led to a re-evaluation of Federal Reserve policy expectations and the Republican Party's significant victories, which jointly propelled dollar appreciation. By the end of last year, the dollar's real effective Exchange Rates (REER) were at a fifty-five-year high, while the nominal effective Exchange Rates (NEER) reached their strongest level in thirty years.

Currently, the dollar is significantly overvalued. The International Monetary Fund's REER equilibrium model shows that the dollar is overvalued by 18.5%, a level of overvaluation almost the highest in the past thirty years, second only to the 19% overvaluation during the 2022 Energy crisis. Internally, Bank of America's BEER (Behavioral Equilibrium Exchange Rates) model estimates that the dollar's overvaluation extent even reaches 26%, far exceeding the 22% overvaluation level of 2022, also the highest point in the past thirty years.

From the perspective of G10 MMFs' REER, the extent of the dollar's overvaluation is also very significant. According to the twenty-year average deviation of REER, the IMF's REER model, and Merrill's BEER model, the dollar is considered the most overvalued currency. The Swiss Franc follows closely, while the yen and Nordic currencies (such as the Norwegian krone and Swedish krona) are the most undervalued. Even based solely on the past decade's average, the dollar's overvaluation remains prominent.

Looking ahead to 2025, Bank of America believes that the USD Exchange Rates may exhibit a trend of "strong at first, then weak." In the short term, driven by US inflation policies (especially tariff policies), the USD will remain strong; however, as these policies harm the US economy and the rest of the world responds accordingly, the USD will weaken later this year.

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