Dollar crosses won’t be following one-way patterns in the coming weeks.

We expect the Dollar to take back some of the late 2023 losses as the expected start of the easing cycle is pushed forward, but a market that remains generally more sensitive to negative US data than upside surprises should be reluctant to chase the Dollar much higher from these levels.

We still see some vulnerability in high-beta currencies as the equity market faces some more headwinds in the near term.

The Euro also appears in a soft spot, meaning the upside risks for the EUR-heavy DXY index are also non-negligible and may extend beyond the 104 December peak over the first quarter.