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FX Trends: The USD’s double whammy

20 May 2024

Key takeaways

  • Renewed dovish hopes for the Fed and associated gains in risk appetite have hit the USD…
  • …but USD weakness looks excessive relative to US inflation data, and could stall or reverse.
  • USD gains could also be fostered by dovish developments elsewhere, notably ahead of ECB and BoE meetings.

Our tactical view

Table of tactical views where a currency pair is referenced (e.g. USD/JPY):An up (⬆) / down (⬇) / sideways (➡) arrow indicates that the first currency quotedin the pair is expected by HSBC Global Research to appreciate/depreciate/track sideways against the second currency quoted over the coming weeks. For example, an up arrow against EUR/USD means that the EUR is expected to appreciate against the USD over the coming weeks. The arrows under the “current” represent our current views, while those under “previous” represent our views in the last month’s report.

Note: ^DXY = US Dollar Index, is an index (or measure) of the value of the USD against major global currencies, including the EUR, JPY, GBP,CAD, SEK and CHF. Source: HSBC

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