BCA Boosts Dollar Forecast as Global Growth Gap Widens

BCA Research has upgraded its forecast for the US dollar, predicting it will reach 105 over the next three months. The analysts cite several factors contributing to this outlook, including resilient domestic data and a widening real-rate gap in favor of the Greenback.

The growth differential between the US and other major economies is expected to continue, with the global industrial cycle driven by AI-powered capital expenditures reaching its strongest pace since 2021. The U.S. is best positioned to capture the next leg of this growth, widening the growth gap with the rest of the G10.

BCA highlighted that global data center construction is set to top $1 trillion next year, with the US pipeline exceeding the rest of the world combined. Recent PMI figures show U.S. output pulling ahead at five-year highs across both manufacturing and services.