The US dollar (USD) is expected to rise further notably against the Euros (EUR) and the Great British Pounds (GBP).
The Federal Reserve stepped up the pace of hikes with a 75 bps increase. Economists at HSBC now expect more rate rises ahead. Despite this, they still expect a stronger USD over the medium term.
The federal funds target range is 3.5% -3.75% by the end of the year. HSBC stated, ”Over the medium-term, we continue to expect the USD to strengthen further, notably against the EUR and GBP.
”built on the Fed’s ongoing marked tightening compared to more measured steps at the European Central Bank and the Bank of England. A slowing global economy is also likely to add further to the USD’s gains.” it added.
Meanwhile, the EUR/USD has turned south after having tested 1.06 on Thursday. The pair has been predicted to extend downward correction as as 1.0520 support fails.