The latest FOMC decision to leave the policy rate unchanged again was widely expected. The FOMC made few changes since its last meeting, with Chair Powell offering a mix of hawkish and dovish comments. This meeting does not change our view that the USD is likely to strengthen further, notably against the EUR and GBP.

The USD should continue to capitalise on the US growth resilience, when compared to continued growth disappointments outside the US. As the full impact of earlier rate hikes becomes evident, the prospect of slower global economic growth into 2024 should also support the USD. In addition, heightened geopolitical risk should continue to favour the ‘safe-haven’ USD.