Investing.com – The stock hit multi-year highs on Friday, hitting a level that an expert said would represent a “Trump Trade” valuation, leaving little room for further gains and creating an opportunity for a bearish dollar turn.
The stock rose 0.5% to 109.67, having previously hit 109.91, its highest level since November 2022.
“Start selling dollar if our DXY 110 target is exceeded. The price takes into account slowing global growth and the relatively more hawkish nature of the Fed. Much like Donald Trump’s presidency,” said Chester Ntonifor, FX/Global Fixed Income Strategist at BCA Research, in a note.
The company claims that this level would be fully incorporated into the “Trump trade” and would be initiated from significantly inflated levels.
The call for a weaker dollar comes as the strategist believes that “the rise in U.S. inflation, especially relative to other markets, is coming to an end” amid expectations of a U.S. slowdown.
While the latest jobs report for December showed no signs of slowdown, Ntonifor sees a risk of a slowdown in the U.S. economy due to “tightening financial conditions in the U.S.”
Looking ahead, Ntonifor suggested that a potential scenario could play out later this year in which “equity markets improve, the U.S. dollar declines and bond yields decline.”
