HSBC Global Viewpoint
The Macro Brief – Return of the King dollar
Sep 8, 2023
A discussion on the US dollar's comeback and its potential to continue rising amidst global growth concerns. Exploring the impact of the changing economic outlook and the Bank of Japan's stance on currencies. Analyzing the influence of China's economy on Asian currencies and forecasts for the dollar. Insights on the return of the King Dollar and updates on upcoming events.
13:30
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Quick takeaways
- The recent strength of the US dollar is attributed to factors such as risk appetite, yield advantage, and concerns about the Chinese economy and other global economic indicators.
- The currencies of Asian countries, including the Korean won, Taiwan dollar, and Singapore dollar, are vulnerable to China's slower economic growth and the dominating strength of the US dollar, which pose challenges for their outlook.
Deep dives
The USD is experiencing a resurgence
The USD has made a comeback in recent months, defying expectations of further weakness. Factors such as risk appetite and the yield advantage have kept the dollar range-bound, while concerns about the Chinese economy and other global economic indicators have contributed to its recent strength. Although the Chinese authorities aim to anchor their currency, uncertainties remain about the effectiveness of this strategy in boosting exports. The overall outlook suggests that the USD is likely to remain strong, with global growth risks and potential rate cuts by other central banks further supporting its position.
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