Bank of America Warns US Dollar Overvalued, May Flip to Undervalued in 2026
The bank states that while the US Dollar currently trades above fair value, shifting economic conditions could lead to an undervaluation next year.
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Terms & Concepts
- Overvalued Currency: A currency is considered overvalued when its exchange rate is higher than its perceived fair market value, reducing competitiveness.
- Undervalued Currency: A currency is undervalued when its exchange rate is lower than its fair market value, often boosting exports and trade balances.
- US Dollar (USD): The official currency of the United States, widely used as the global reserve currency and benchmark in international trade and finance.