Last month, the US currency was torn between opposing forces, and the DXY Dollar Index ended the month lower. HSBC economists forecast USD weakness in 2023.
A soft landing for the US economy should weaken the USD overall
“We believe that the USD will weaken further in 2023since its significant overvaluation (based on the real effective exchange rate (REER)) can no longer be supported, once the Fed stops raising, global growth shows signs of faltering and market volatility subsides“.
“We recognize that there would be demand for a ‘safe haven’ for the USD, if the US economy enters a deep recession. However, we view it as a risk scenario, rather than an inevitable outcome.”
“If the US economy achieves a smoother decline, the USD is likely to weaken. That’s our base case for 2023“.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
