Stronger for longer is the US dollar theme | Forexlive

What’s happening? There are certainly signs of weakness in other global economies but consumers are proving resilient. Earlier today, Australian retail sales rose 0.7% compared to 0.1% expected.

The market may have underestimated the power of fiscal stimulus, pent-up savings and house price growth. There are certainly people hurting due to higher mortgage rates but there may be a larger portion of home owners that have low mortgages balances and a windfall from housing wealth.

Governments also spent heavily on long-lead infrastructure in the US. That money is just beginning to be spent.

There are also the lags of monetary policy to take into account but a higher-for-longer scenario is increasingly believable — and a stronger for longer dollar along with it.