The US dollar has made significant gains against all the major currencies over the last month as worries over trade tensions between the US and China as wells as Brexit boost the currency’s appeal as a safe have assets but according to some analysts the gains may not continue for much longer.

The US Federal Reserve has pledged to be patient with interest rates and has vowed to keep them on hold and wait and see how the US economy pans out and so far there has been no mention of cutting rates but some believe this may change over the next few meetings which will see the greenback come under pressure.

US treasury yields have been drifting lower in recent weeks which may mean the market is bracing itself for a rate cut later in the

“UST yields have moved considerably lower, with the 10-year dipping to 1-1/2-yr lows at 2.28%. The widely followed 2-10yr spread is nearing trend lows hit in March around +13bps, and thus flirting with an inversion that would raise worries of a U.S. recession.” says Paul Spirgel, an analyst at Thomson Reuters.

 “Markets project falling rates – in contrast to Fed officials, who expect to hold steady this year and deliver a small hike 2020. It is worth remembering that the last protracted dip in the UST 2-10 spread, in December 2018, was followed by the Fed's decision to halt its rate normalisation programme, causing the Dollar to weaken,” he added.