The US Dollar is markedly weaker after the March FOMC meeting. Economists at HSBC believe the near-term USD path is likely to remain choppy.

Uncertainty remains high, data and banking sector developments are key

“The potential USD upside of a 25 bps hike was offset by the unchanged median interest rate projection for 2023.” 

“The Fed does not foresee policy easing this year, while markets are contemplating cuts. Resolution of this gap between the markets and the Fed will hinge not just on the data but also on banking sector developments. Until there is clarity, the USD may remain trapped yet choppy, albeit at a weaker level than before this March FOMC meeting.” 

“Ultimately, we expect the USD to resume its weakening trend.”