Our view of modest USD strength in 2024 is not based on an anticipated calamity, either for the US economy or elsewhere. As such, the impact of Fed easing on the USD falls into the realm of uncertainty, rather than ‘safe-haven’ USD bullishness. 

Rate cuts delivered in tandem with slower US inflation would also mean that US real interest rates would probably remain positive, supporting the USD.

Shallow cuts could eventually lead to the US economy regaining momentum, and for the USD to remain supported.