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Dec 02 - 12:55 PM

USD: Too Early To Expect A Fed Pivot; USD Is Looking Cheap Here - Credit Agricole

By eFXdata  —  Dec 02 - 11:15 AM

Credit Agricole CIB Research discusses the USD outlook and sees a scope for USD gains into year-end.

"While we still think that most of the recent USD weakness resulted from a correction of excessive FX market longs, we further note that investors have more recently started reassessing their Fed outlook against the backdrop of stabilising US inflation and softening growth momentum. We expect these economic trends to persist, and this makes us think that the USD should peak in 2023. We also believe, however, that it is very early to expect a Fed ‘pivot’ and continue to expect further aggressive tightening that could fuel headwinds to global risk sentiment and help the high-yielding, safe-haven USD regain some ground into year-end," CACIB notes. 

"We further note that a sizeable chunk of the market USD longs have been unwound while the USD is looking cheap relative to its relative rate appeal across the board," CACIB adds. 

Crédit Agricole Research/Market Commentary


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