The dollar has cranked higher in the opening months of the year, a poke in the eye for the bulk of Wall Street analysts who had predicted a decline.

The dollar index, which tracks its value against six other major currencies, jumped 3.6 per cent in the first quarter, its best run since 2018 and a sharp turnround from the 6.8 per cent slide last year. It has since pulled back around 1 per cent.

The still robust year-to-date gains have confounded analysts, whose expectation for a strong global recovery to pull the world’s reserve currency 3 per cent lower this year was one of the strongest consensus calls for 2021. Instead, signs that the US will outperform other major economies have pushed it up.

“The dollar has been strong. That’s not surprising given the amount of pessimism that had gone into markets,” said Jim Leaviss, chief investment officer for public fixed income at M&G Investments, noting that…

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