Fed tightening nearing an end may suggest limited upside for USD – OCBC

Economists at OCBC Bank analyze the US Dollar outlook.

A moderate-to-soft USD profile

Moderate-to-soft USD profile as Fed tightening goes into late cycle with an end-in-sight. 

Need a more entrenched disinflation trend to reinforce the end-in-sight view and likely for the USD to trade softer. But near term, the risk of hawkish Fed and a bumpy disinflation path may well keep USD temporarily supported in the early part of the third quarter of 2023.

See: Fed cuts delayed to next year, upgraded view on the USD – ABN Amro