Will the dollar continue to slide down or will it give the bears on USD an unpleasant surprise?

The market adage about having to sell stocks in May and leave the market doesn't seem to work this year.

Key US stock indexes finished the last month of spring in close proximity to all-time highs.

In May, the S&P 500 even managed to reach a new record around 4230 points, adding more than 0.5% at the end of the month.
The factors in favor of the continued growth of stocks are becoming less and less, and voices are heard more and more that the market is very overheated, and a correction may not be far off.

However, neither sufficiently high inflation rates in the United States, nor the proposals of the Joe Biden administration to raise taxes, can move the market down so far.

The main reason for the market resilience is the Fed's commitment to extremely loose monetary policy.

Will the dollar continue to slide down or will it give the bears on USD an unpleasant surprise?

Fed officials continue to actively support risky assets with statements about the temporary nature of inflation and low interest rates for a long time.

According to experts, the previous fears may return to the market in June, especially if the statistics for May reflect the increase in price pressure.

A sharp spike in US inflation in April sparked fears that this would force the Fed to raise interest rates earlier than previously expected.

However, signals from the Federal Reserve indicate that the regulator is in no hurry to reduce liquidity. The cost of borrowing in the US remains low, money is still very cheap, and there is no clear reason for US stocks to fall.
This leaves the safe greenback under pressure, which is still one of the outsiders in the foreign exchange market.

The U.S. currency has lost nearly 4% in value from March highs as other major economies began to catch up with the United States in terms of COVID-19 vaccinations.

At the same time, some leading central banks have indicated an inclination to tighten the monetary exchange rate. Apparently, they will act faster than the Fed to abandon the easy money policy and allow interest rates to rise.
The pound became the top performing currency in the Big Ten last month.

The GBP / USD pair hit its highest levels since April 2018 on Tuesday.
Johns Hopkins University estimates that at the current rate of vaccination in the United Kingdom within a month, the proportion of the country's population receiving two doses of the coronavirus vaccine will be 75%.
FX24

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