📝Strong U.S. Data Supports USD: Nordea

Overall, the US economy continues to show resilience despite higher energy prices, which will push household expenses higher. Strong US data have offered some support to the dollar, but we expect the dollar to weaken in the coming months due to structural factors.

We forecast the Fed to remain on hold, but if the data continue to be strong, we do not rule out a rate hike. That said, the probability of a hike during the summer remains low.

Our baseline remains four ECB hikes in total although a weaker growth outlook could ultimately result in a shorter hiking cycle. So far, surveys have been weak, but hard data have held up better, and the ECB remains primarily focused on inflation.