USD fading strength may lead to a reversal of half of the cycle's dollar gains. The USD has performed very well over the last 18 months, but a number of the forces that propelled it towards its highest valuation in decades are seen losing ground.
This does not mean that there is now just cause for the USD to swing from an overvalued state to an undervalued one. Dollar likely choppy for next few months followed by a softer path appearing from Q2 onwards.
Recommend buying GBP/USD as “tide may be turning” for the pound. There are early signs external accounts are starting to re-balance, fiscal vulnerability is more limited, and it has a strong tie to risk appetite. See GBP/USD at 1.14 at year-end, at 1.25 by end-2023 - HSBC FX Strategy
Comentarios