Economics
Just the Mechanics of the Fed's Exit Strategy Could Boost the Dollar
But a stronger greenback could complicate matters
Rotating out of euros and into dollars.
Photographer: Kiyoshi Ota/BloombergThis article is for subscribers only.
The U.S. dollar has risen 17 percent against the euro over the past year, as the Federal Reserve has drawn closer to raising interest rates for the first time since 2006.
There could be further appreciation ahead for purely mechanical reasons, given the unique nature of the upcoming tightening cycle and the new tools the Fed will use to raise rates, according to Zoltan Pozsar, a director of U.S. economics at Credit Suisse Securities USA in New York.