Risks to the economic picture

Geopolitical tensions and and an energy price shock continue to be key risk factors on the horizon for the U.S. economy and the dollar.

“Oil is certainly a potential risk factor,” Buskas warns. “If we see a sustained spike in oil, that will certainly be a downside risk for growth.”

However, a retreat has been seen in energy prices lately. Nearby NYMEX crude oil futures have plunged sharply lower. After spiking to the $69 per barrel level, crude has plummeted to the $58 dollar region in a matter of weeks. As always, “geopolitics remains an on-going risk,”

Buskas says. “If we start to see heightened tensions to the extent that it affects the markets, it will be dollar-negative.” Traditional safe-haven buying flows have moved toward U.S. Treasuries, gold, and the Swiss franc during times of geopolitical instability.