MUFG: Higher-for-Longer Rate Backdrop Supports US Dollar

In a research note, MUFG analysts Lin Li, Michael Wan, Lloyd Chan and Khang Sek Lee stated that firmer US inflation and resilient labor markets underpin a higher-for-longer global rates backdrop. This environment, they argue, continues to support the US dollar.

The analysts did not provide specific timing or levels but emphasized that the persistence of elevated rates globally, driven by US economic strength, favors the dollar's near-term outlook.