RBC: yield differentials will favour dollar over others

Despite falling US interest rates, the dollar will remain a high-yielding currency

Image of a hot air balloon made of a 100 dollar bill
Diverging interest rates will keep currencies like the euro and the yen on the back foot against the dollar for the foreseeable future

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Despite falling US yields, the sizeable interest rate differential that remains between the dollar and other major currencies will favour the US currency against G10 currencies over the next year, says Adam Cole, RBC’s London-based head of FX strategy.

Cole explains that the Canadian bank is putting more weight on the actual yield differential between the dollar and other currencies than the decreasing path of US

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