UBS says it stands by its recommendation to capitalize on any further strength in the US dollar by selling.

Analysts cite recent changes in expectations regarding Federal Reserve and US government policies that have strengthened the dollar since the release of their “The Year Ahead 2025” report. However, they believe the dollar remains overvalued. Adding that they do not foresee a sharp decline in the near future, but suggest that traders use the strength of the USD to diversify into other favorite currencies, such as the British pound and the Australian dollar.