Signal over Noise with Ulrike Hoffmann-Burchardi
At a Glance
The desk is bullish on the U.S. dollar as recent statements from President Trump are anticipated to shift market dynamics, especially regarding oil prices and housing affordability. Per the full note source, Trump's aggressive policy approach aligns with a broader Federal Reserve easing narrative sparked by softer labor market data. Notably, mortgage rates have dipped due to federal interventions, stimulating potential domestic spending and supporting the dollar. Amid geopolitical tensions and a focus on price stability influencing voter sentiment, the dollar's rally is expected to be supported through 2026.
Key Takeaways
- 01U.S. dollar bullish sentiment driven by Trump's focus on economic stability and voter concerns.
- 02Recent drop in mortgage rates to sub-6% could stimulate domestic spending.
- 03Geopolitical tensions, particularly in Venezuela, may influence oil prices and positively affect dollar strength.
- 04The desk’s view contrasts with a bearish outlook from **bofa**, highlighting diverging market opinions.
Full Analysis
What the desk is arguing
The desk maintains that the U.S. dollar is poised for a rally as President Trump's recent announcements are likely to provide robust support for the currency. The focus on housing and energy prices reflects a strategy that resonates with voter concerns, which consequently affects market sentiment and economic indicators. Per the full note source, Trump's directives to lower mortgage rates are significant, with rates now below 6% for the first time in years.
Moreover, the geopolitical landscape—particularly U.S.-Venezuelan tensions and the implications for oil supply—adds another layer of complexity. If successful, these geopolitical maneuvers could stabilize or lower oil prices, which would likely be welcomed by U.S. consumers and boost support for the dollar given the importance of energy prices in the inflation narrative.
Where it sits in our coverage
Our consensus target for the U.S. dollar against a basket of currencies stands at 1.075 with a range between 1.04 and 1.12. Specific targets from key institutions illustrate the divergence in market outlooks:
The desk's bullish stance aligns closely with jpmorgan, whereas bofa holds a contrarian view, predicting a significantly lower target, contributing to a mixed sentiment within the market.
How other firms see it
Firms like jpmorgan are aligned with the desk's bullish perspective on the dollar, hinging their forecast on favorable domestic policies and geopolitical developments. In contrast, bofa takes a contrary stance, suggesting a bearish outlook for the dollar.
Movements in oil prices will play a critical role in validating the desk's thesis, particularly as energy markets react to both U.S. domestic policies and geopolitical events involving key oil-producing nations.
Market Implications
Traders should monitor the 1.075 level closely as a signal for potential dollar strength, especially with Trump’s policies aiding consumer sentiment. Oil price developments, particularly regarding Venezuela, will also be critical in shaping dollar dynamics moving forward.
From the original
Tune in at the start of the trading week ahead of the New York opening bell as Ulrike Hoffmann-Burchardi, CIO Americas and Head of Global Equities for UBS Wealth Management, briefs you on what’s the signal, and what’s just noise in the markets. Recorded on 11 January 2026.
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