HSBC’s FX Viewpoint argues the broad US Dollar is likely to strengthen modestly in the near term as cyclical, political and structural forces turn more supportive. The bank highlights firm US rate expectations relative to other economies, resilience in energy prices and a reassessment of US fiscal risks as factors favouring the Dollar versus major peers.
USD supported by rates and energy
"We expect the broad USD to strengthen modestly in the near term as cyclical, political and structural forces turn more supportive or become less of a headwind."
"The key question is whether US rate expectations will remain firm relative tothose elsewhere."
"However, energy-price resilience and a broader reassessment of fiscal risk should also favour the USD at the margin."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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