A stronger USD is expected in the near-term. However, economists at CIBC Capital Markets believe that medium-term USD risks are to the downside.

USD could be supported in the near-term

“The USD could be supported in the near-term by resilience in the economy and continued Fed hikes, and although we may add a hike to our existing forecast, we still expect the Fed to undershoot the market's hiking expectations, weighing on the USD into mid-year, as attention turns to other advanced economies that are raising interest rates.”

“Q2 2023: 100.4 | Q3 2023: 99.5 (DXY)”