Growing conviction of a soft landing in the global economy and a more hawkish view across the G10 central banks outside of the US are weakening the Dollar, economists at ING note.

Increasing hawkishness shown by the rest of the central banks in the G10 space

Inflation forecasts and expected tightening cycles are being revised higher across the board and in some cases more aggressively than in the US. This includes recent surprise hikes from Australia and Canada, a very hawkish ECB meeting yesterday, and very aggressive expectations for Bank of England rate hikes.

Bullish global risk environment

Investors are cutting allocations to cash and look to be putting money to work in bonds, equities and emerging markets. Against all the odds the MSCI world equity index is up 14% year-to-date and fund managers are surprisingly suffering from a Fear Of Missing Out (FOMO) on a good rally in benchmark risk assets