In the view of economists at HSBC, the USD’s outlook relies upon on world growth, threat appetite, and relative yields however they nevertheless do now not see a shift in these three drivers. As such, the US dollar will continue to be resilient.
Ongoing and power strength
The USD is probably to stay supported by means of a deteriorating international increase outlook, with rising recession chances in Europe and the UK.
“The Federal Reserve is in all likelihood to proceed to hike costs till early 2023 earlier than maintaining its coverage price constant all through 2023, in accordance to our economists and the cutting-edge charges market expectations. In different words, the Fed’s tightening direction and related USD power are probably to persist.”
“It is challenging to see how danger urge for food can exchange for the better, whilst international boom weak spot and central banks pivoting to price cuts are now not on the near-term horizon. The contemporary risk-averse tone in economic markets is probable to additionally guide the USD, given its ‘safe-haven’ profile. Nonetheless, it will be necessary to see if threat urge for food improves, as soon as markets accept as true with central banks have raised quotes enough.”
