The call here is for the Fed to start easing rates in July. As the market re-prices to that timing, the USD should still gain a bit more in the near term. But into H2, we expect the theme of USD weakness to pick up steam as the Fed looks to slow its own version of quantitative tightening (QT) which would put it at odds with how other central banks are proceeding with their own programs. 

Additional drags should come from relatively hawkish policy outside of the US (Japan and the UK), continued deficit spending in the US, and the general sense of overvaluation for the Greenback on a longer-term basis.

DXY – Q1 2024: 104.83 | Q2 2024: 102.39