Our medium-term expectation remains one of modest USD strength, notably against the EUR and GBP. This is based on the US economy’s continued outperformance against many of the other G10 economies, and US bond yields remain higher than those in most other G10 economies.

In addition, we do not expect the collective easing among G10 central banks to match dovish market expectations. A less aggressive easing path could see risk appetite falter, supporting the USD. 

Finally, should other G10 central banks pivot, their currencies are likely to face downward pressure.