Synopsis: Amidst a challenging global economic landscape, Société Générale offers a nuanced perspective on the USD, projecting a period of range-bound trading for major currency pairs EUR/USD and USD/JPY as dollar bulls lose momentum.

Key Points:

1. USD Performance: The U.S. dollar's relative outperformance persists, backed by a stronger U.S. economy and marginal rate advantages.

2. Economic Data Watch: While European data weakness has not propelled the dollar forward, significant bearish momentum for the dollar is expected to manifest more clearly next year.

3. Near-Term Predictions: Société Générale posits that a consolidation period may be forthcoming, with EUR/USD to oscillate between 1.04 and 1.08 in the coming weeks.

4. USD/JPY Forecast: There is anticipated room for a pullback in the USD/JPY pair, with a projected trading range of 145 to 150.

5. Potential for Commodity Currencies: Currencies such as the NOK, SEK, AUD, and NZD, all of which have weakened significantly against the USD this year, may find an opportunity to regain ground in the face of positive developments.

Conclusion: Société Générale's analysis suggests a period of relative stability for the dollar against major currencies, with limited ranges expected for EUR/USD and a moderate retreat for USD/JPY. While current economic indicators provide a mixed outlook, the dollar's position could become more clearly bearish in the following year, hinting at a potential strategic pivot for currency traders. Commodity currencies, having suffered declines, may see upside if their economies can deliver encouraging news.