HSBC is looking for the USD to fall further, saying that with the end of the Federal Open Market Committee (FOMC) hiking cycle being near there are 3 triggers to watch for fresh weakness:
- risk appetite remaining strong
- US economic statistics not outperforming the rest of the world as much
- a sustained slowdown of global inflation, including a sharp decrease in US core inflation
HSBC says that the ideal situation would be for the US economy to perform a “soft landing” and for the rest of the world, especially China, to have some improvement (vs. expectations) in their economic growth outlook.
HSBC concludes:
- Should these conditions occur, the range-bound USD is set to end and its downtrend should resume, and this is our central case through the rest of this year and into 2024
—
DXY weekly candles:
