As the Fed's rate hike process draws to a close, a growing number of people in the financial industry are pessimistic about the dollar's prospects.

Typically, when the Fed raises interest rates and increases the federal funds rate, the dollar index tends to rise. Conversely, if the Fed cuts rates, the dollar index usually falls.

Economists at Wells Fargo expect the dollar to depreciate modestly in the fourth quarter of this year, with a faster pace of depreciation next year. The dollar is likely to be relatively stable in the near term, as further Fed tightening, combined with the potential for minor market turbulence, could provide temporary support for the greenback. However, the bank expects the dollar to eventually come under pressure as the Fed implements aggressive easing from early 2024. Wells Fargo forecasts a 1.5% decline in the dollar index DXY in 2023 and a further 5% decline in 2024.

Ubs said in a previous report that the U.S. debt ceiling impasse should have limited impact on the dollar. History suggests that the debate over a new debt ceiling deal will continue to appear in the media, but the impact on the dollar should be limited because the forex market is forward-looking and the market assumes that Congress will reach a deal at the last minute. While the dollar has benefited from the current macro uncertainty, maintain a bearish view on the dollar. Ubs believes that the reduction of US yield arbitrage, the reversal of European terms of trade and capital outflows from the US dollar could be headwinds for the dollar in the second half of the year.

Michael Hartnett, chief investment strategist at Bank of America, said the dollar is now in its fourth bear market in the past 50 years, with a 20 percent decline in the dollar index over the long term. At the same time, Bank of America is bullish on international gold prices and emerging economy equities during the dollar bear market.

Coincidentally, Galaxy Securities pointed out that the Markit services PMI in the United States in May continued to rise to a new high, and the core PCE in the United States in April exceeded expectations, making the market's expectations for the Federal Reserve to raise interest rates by 25 basis points in June rise. Last weekend, the two parties in the United States reached an agreement in principle on the US debt ceiling negotiations, and the solution of the US debt problem is conducive to the US bond interest rate to decline again, and the positive gold price rebound. In the medium term, the risk of recession in the United States still exists, the Federal Reserve still has the possibility of interest rate cuts in the second half of the year, and the gold sector is in a better layout stage before interest rate cuts after experiencing short-term shocks.

Citic Construction investment futures also analyzed that precious metals are in the short-term valuation pressure stage, but in the long run, the interest rate curve is easy to fall and difficult to rise, and the relative strength of the US economy is also weakening, so for precious metals, there is still allocation value.