The USD is likely to be on the defensive in the near term, but we think the headwinds from yield differentials to the USD may not be large, as the Fed will likely be easing alongside other central banks (no matter from the market’s or our economists’ expectations). 

We believe the USD will probably be supported in 2024 by a slowing global economy, one where recession risks still loom and where the ‘safe haven’ USD will continue to offer a relatively high yield.