Eviantyus
Member
USD Market Overview
The Fed just cut rates by 25bps, acknowledging weaker labor market conditions, a slight uptick in inflation, and a more balanced risk outlook. Here’s how major institutions are reading it:
- ANZ & Deutsche Bank: See the cut as more of a “risk management” move due to labor market weakness.
- Nomura: Projects easing could continue all the way into 2026.
- ING & MUFG: USD still looks a bit expensive, but the Fed’s dovish tone limits support → bias stays bearish.
- J.P. Morgan: Powell hinted at two more cuts, though their FX desk noted USD could show some short term strength.
- Société Générale: Any USD strength would come from fear driven flows, not yields.
- UBS: Projects a clear 12 month depreciation as US growth slows relative to peers.
- Crédit Agricole & Mizuho: Point to USD/JPY, with Japanese politics and falling yields reinforcing the case for more cuts.
Bias: Bearish USD
Most institutions expect the dollar to weaken as the easing cycle progresses and US growth slows. Still, short term rebounds are possible before the broader depreciation trend takes over.
What about you guys, how are you positioning your strategy with USD in this environment?
