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Dollar recovers amid tech-led risk-off, BBH flags upside bias
Brown Brothers Harriman expects the dollar to edge higher over the next couple of months, citing US economic outperformance, hawkish Fed pricing, and foreign demand for long-term US securities.
Brown Brothers Harriman strategist Elias Haddad said the US dollar has recovered part of the week’s losses as a tech-led equity selloff triggered a modest flight to safety.
FXStreet reports Haddad expects USD to grind higher over the next couple of months, supported by what he sees as US economic outperformance, pricing that remains hawkish for the Federal Reserve, and strong foreign demand for US long-term securities.
Haddad pointed to resilient consumer activity, noting that US retail sales rose 0.2% month over month versus 1.0% in May, while the control-group measure increased 0.5% versus 0.8% in May.
He also highlighted that headline CPI fell 0.4% month over month in June and said upcoming data including University of Michigan sentiment and housing starts could feed into the Atlanta Fed GDPNow model update, which as of yesterday estimated annualized Q2 real GDP growth of 1.7% quarter over quarter.