USD to soften in Q2/Q3 as Fed easing risks are renewed and the US economy slow – Scotiabank

Market news

19 January 2024

USD to soften in Q2/Q3 as Fed easing risks are renewed and the US economy slow – Scotiabank

US Dollar’s rebound develops a little more traction. However, Shaun Osborne, Chief FX Strategist at Scotiabank, expects USD to weaken from the second quarter of the year.

USD/CAD sellers can be patient for now

I still look for the USD to soften in Q2/Q3 as Fed easing risks are renewed and the US economy slows.

A broader easing in central bank policy in H2 should be supportive for risk appetite and add to USD headwinds later this year. Seasonality also turns generally USD-negative in Q2/Q3.

USD/CAD sellers can be patient for now; levels nearer 1.3500/1.3600 could be seen in the next few weeks.

There is more upside for both equity and bond markets – UBS

USD/MXN moves lower to near 17.16 ahead of Mexico Retail Sales, US Consumer Sentiment

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