UBS Group revises dollar forecast amid trade war concerns

UBS Group has revised its dollar outlook for the second time in just over two months, citing the growing economic impact of the ongoing U.S.-China trade conflict. The investment bank now anticipates greater pressure on the dollar, driven by trade tensions and their influence on U.S. capital flows.

Analysts at UBS noted that President Donald Trump’s tariff policies have had a more significant effect on cross-border investment than initially projected. As a result, UBS is reaffirming its earlier expectations for a stronger euro and Japanese yen, with forecasts showing the euro weakening to 1.23 against the dollar and the yen strengthening to 130 by the end of the year.

The Bloomberg Dollar Spot Index, a key measure of the dollar’s strength against a basket of major currencies, has declined six percent year-to-date, marking its weakest performance since December 2023. This downward trend reflects growing investor concern over trade instability and its broader economic implications.

The adjustment by UBS highlights shifting market sentiment as global investors increasingly hedge against prolonged uncertainty in U.S. trade policy and its ripple effects across international markets.

Source: www.bloombergtv.mn