US Dollar: Strength reflected in year-end forecast revisions – OCBC

Source Fxstreet

OCBC’s Sim Moh Siong and Christopher Wong highlight that recent AI-related equity weakness has boosted safe-haven demand and supported the Dollar. They now forecast EUR/USD at 1.11 and USD/JPY at 163 by year-end, revising up their US Dollar (USD) outlook from rangebound to modest strength, with US Dollar Index (DXY) seen having 2–3% upside unless Oil or US growth surprise sharply.

Revised year-end levels and DXY upside

"Hawkish Fed signals lift USD, shifts our view to modest strength from rangebound."

"New USD forecast: EUR/USD at 1.11 (previous: 1.18) and USD/JPY at 163 (previous: 155) by year-end. "

"DXY breakout targets 2 to 3 percent upside; 5 percent move requires oil surge or US overheating scenario. A firmer USD alongside widening rate differentials tends to weigh most on low-yielders such as CHF and JPY."

"Procyclical carry can still perform, but trade resilience will depend on selecting appropriate funding currencies"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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