UBS expects the US dollar to weaken as the Fed pivots to easing and energy prices normalize, favoring pro-growth currencies like AUD and SEK. Geopolitical risks in the Middle East remain the primary headwind for this bearish USD view.
Key Takeaways
- 1.The US dollar is expected to weaken as energy prices normalize and the Federal Reserve resumes its easing cycle.
- 2.UBS prefers selective exposure to pro-growth and commodity-linked currencies like SEK, NZD, AUD, and CNY.
- 3.Emerging Market FX carry is appealing for total returns, but spot gains are limited due to high energy prices and Middle East risks.
Table of Contents
- FX Monthly VIEW
- CIO View: Currencies
- Risks to our view
- Appendix
Document Preview
Access the Full Report
Get unlimited access to institutional research reports with a 14-day free trial.
Authors
Dominic SchniderTilmann KolbConstantin BolzTeck Leng TanClémence DumoncelWayne Gordon
Securities
DXYEURUSDGBPUSDUSDCNYEURSEKEURNOK
Themes
Energy Price NormalizationCentral Bank PivotMiddle East Geopolitical Risk
Regions
North AmericaEuropeAsia PacificUnited StatesChinaAustralia