$Dollar Poised for Final Rally as AI-Driven Growth Cements U.S. Outperformance

BCA Research is predicting a final rally for the U.S. dollar as it capitalizes on its multi-month cycle. According to BCA, resilient domestic data and a widening real-rate gap in favor of the Greenback will support the currency in the near term.

The firm raised its three-month target for the dollar to 105, arguing that the global industrial cycle, powered by AI capex, is running at its strongest pace since 2021. The U.S. economy is best positioned to capture the next leg of 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 U.S. construction pipeline alone exceeding the rest of the world combined. The U.S. economy is better insulated against high energy costs and elevated interest rates compared to European and Asian peers.