USD may yet continue to appreciate – NBF

FXStreet Insights Team FXStreet

Economists at the National Bank of Canada discuss USD outlook.

Fed will leave rates unchanged until the first quarter of 2024

The US sovereign debt crisis, which weighed on the greenback, has been resolved. Last month, we also argued that market expectations of imminent monetary easing seemed rather ambitious. Since then, the market has turned 180 degrees and now expects the Fed to raise its key rate again this summer.

As we see the unemployment rate continuing to rise over the coming months and lending conditions tightening at commercial banks, we believe the Fed will leave rates unchanged until the first quarter of 2024, before lowering them thereafter as the economy contracts.

Expect the Dollar to appreciate slightly over the coming months, before a possible bout of weakness next year.

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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.

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