Wall Street banks are reinforcing their calls that the dollar will weaken further, hit by interest-rate cuts, slowing economic growth and President Donald Trump’s trade and tax policies.

Bond investors are demanding more and more compensation to hold long-dated US debt as global markets grow anxious about the widening fiscal deficit in the world’s biggest economy.

A global bond rally ignited by signs that inflation in the world’s largest economy is finally slowing once again faces a reality check this week.

Bonds rallied for a second day as traders bet an aggressive streak of global interest-rate hikes is close to ending, bolstered by optimism that inflation in the world’s biggest economy will continue to slow.

The dollar resumed declines on Monday in New York amid a rebound in US equities and other risk assets ahead of fresh inflation data and the results of mid-terms elections this week, which hurt demand for the safety of the greenback.

Some risks aren’t going away any time soon for emerging markets, irrespective of the overwhelming view among investors and strategists that 2021 will be a year of continued recovery.