US: End to rate hikes will coincide with an end to USD gains during early 2023 – Wells Fargo

FXStreet Insights Team FXStreet

In the view of economists at Wells Fargo, end to monetary tightening should bring the US Dollar's gains to an end by early 2023.

Eventual US recession to soften the greenback

“An end to rate hikes will coincide with an end to USD gains during early 2023. Indeed, we believe a peak in the trade-weighted US Dollar for the current cycle has already been reached.”

“Over time, we forecast a trend of USD depreciation to gather pace. Initially, that depreciation may be modest during the latter part of 2023, as the US economy falls into recession while other international economies stabilize.”

“We forecast a somewhat more pronounced pace of USD depreciation in 2024, once the Fed begins cutting its policy interest rate by early next year.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD struggles above 1.1500 despite USD weakness

EUR/USD struggles with its recovery above 1.1500 in European trading on Monday, despite broad US Dollar weakness and improved risk sentiment. The USD loses traction following US President Trump's call off an attack on Iran and that talks between the two sides would happen on Monday. Traders will closely monitor the developments surrounding US-Iran negotiations and US ISM PMI data.

Gold extends range play below $4,100 as rebounding USD meets receding Fed hike bets

Gold struggles to capitalize on a modest weekly bullish gap opening, and remains below the $4,100 mark heading into the European session. The US Dollar stages a modest recovery from its lowest level since June 17, which is seen capping the upside for the commodity. The upside for the USD, however, seems limited amid renewed hopes for a US-Iran peace deal and receding US Fed rate-hike expectations.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Solana risks a steeper decline below $70 despite steady ETF inflows

Solana (SOL) is trading in the red, losing bullish momentum and remaining capped below its 50-day Exponential Moving Average at $75.68. SOL-focused Exchange Traded Funds show resilience with a monthly inflow of $14.62 million in July, while the near-term retail support wanes with the funding rate turning negative.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.