The dollar rose to new cycle highs in early 2020 before pulling back in recent months. On a real trade-weighted basis, the dollar currently is 8% above the average valuation over the past 20 years, down from a 16% overvaluation in April 2020. The value of the U.S. currency reflects several factors, but primarily the relative strength of the U.S. economy and global investor confidence in the U.S. Federal Reserve and Department of Treasury as the world battles COVID-19. We anticipate a trading range around current levels for the greenback this year. That's because potential improving trends in the euro and pound sterling could attract currency investors. Further, rising U.S. debt levels (in the wake of the recently approved $1.9 trillion fiscal stimulus plan and ahead of another possible $2 trillion or more spending on infrastructure) may deter some global investors from investing in dollar-denominated securities. As well, the lofty valuation of the greenback implies that other currencies -- and even gold or bitcoin -- are possibly undervalued, and traders can be expected to bid up those values over time.