Our simple thesis is that tighter interest rates finally catch up with the US economy next year, growth registers a paltry 0.5% and the Fed, in line with its dual mandate to focus on inflation and maximum employment, cuts rates back into less restrictive territory. We forecast 150 bps of Fed easing next year starting in the second quarter.

Our baseline view for 2024 sees the Dollar bear trend picking up pace through the year. 

Compared to year-end 2024 forwards, currencies could be as little as 2% (China’s Renminbi) to as much as 13% (Scandinavian FX) firmer against the Dollar.