The weakness in the dollar is largely due to the 'abnormal' conditions that are currently happening in the US Treasury bonds. The 30 Year US bond is currently trading at a yield of 3.824%. The 3 Month US Treasury Bill is currently trading at 5.171%. This is the inverse of what actually is the case under normal conditions. Long term investors should (and demand) to be compensated more than the short term investors. There are many reasons for this. They are taking on more risk. 30 Years is also a long time, you may even die before your investment matures, but on the other hand, you can be 90 % sure you will be alive in 3 months.
The FED started rising interest rates for the dollar last year. (2022 March). At first, the rate of increase was 0.75% points, then 0.50% points, and most recently 0.25% points. This is a clear trend that will culminate with the FED pivoting in the next few announcements. After pivoting, once the next economic cycle begins, the situation with the Bond market will return to normal, because with lower interest rates - economic growth will be stimulated -and the stock market will boom - therefore short term investors will abandon the short term Treasury Bills and invest the stock market for better returns.
The FED started rising interest rates for the dollar last year. (2022 March). At first, the rate of increase was 0.75% points, then 0.50% points, and most recently 0.25% points. This is a clear trend that will culminate with the FED pivoting in the next few announcements. After pivoting, once the next economic cycle begins, the situation with the Bond market will return to normal, because with lower interest rates - economic growth will be stimulated -and the stock market will boom - therefore short term investors will abandon the short term Treasury Bills and invest the stock market for better returns.
Thedeveloper