Us Dollar Strength Will Be Consistent This Time

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Us Dollar Strength Will Be Consistent This Time

HSBC - US Dollar Strength Will Be Consistent This Time

According to the latest analysis by the HSBC economists, the strength seen in the US Dollar is gradual but more consistent this year. So, when we compare the USD strength this year with the last one, it becomes clear that the USD strength is here to stay.

The global growth is declining, which is an important factor behind the US Dollar support. At the same time, the rates in the USA are at historic highs, which is another factor that supports the case of a stronger US Dollar. Although the higher rates aren't so good for the equity markets, they have allowed the US Dollar to gain enough strength in 2023.

No End Of Tightening Cycles

In the past few months, even the equity markets around the globe delivered good performance on the optimism that the central banks will end their rate hike cycles. However, the optimism is now starting to fade after inflation has shown its true colors.

But even if the global equities turn negative, it will still be positive for the greenback, which means we will see more USD gains in 2024.

According to some, the USD strength is about to end as the greenback will reverse most of its gains. For them, the reason behind this analysis can be traced back to the overvaluation of the dollar. The HSB believes otherwise as they say the US economic conditions and the macroeconomic situation continue to support a stronger US Dollar.

With only a few months left in the year 2023, the real question now is how the US Dollar will end the year. The bulls will surely try to achieve a good yearly close, while the bears will try to defend the upcoming resistance levels. If we take the HSBC analysis as true, it simply means the USD will continue to have the upper hand against its peers.

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