The US Dollar will likely weaken anew when uncertainties about the Fed, the US economy’s landing and China’s recovery resolve, in the view of economists at HSBC.
Gap between the Fed’s guidance and the market’s less hawkish perspective remains in place
“We think the path of the USD is likely to remain choppy in the coming months.”
“That gap between the Fed and the market still needs to be resolved, as does the debate about whether the US economy is heading towards a notable recession.”
“China’s growth prospects also remain central to the path for risk appetite and the USD. We believe these will be resolved over time, with the growth-inflation mix turning for the better. This will then open the door to a weaker USD.”