USD likely to retain some vigour into year-end – ANZ

The USD bull market is mature but is not yet over, economists at ANZ Bank report.

Weaker USD eventually

We expect widening of growth and rate differentials between the US and other major economies to dominate FX markets into year-end.

Beyond 2023, we think real interest rates in economies outside the US will catch up and move into positive territory. 

As US growth converges closer to European fundamentals, expectations of Fed rate cuts will firm up, which will likely drive the USD lower. But this is more of a 2024 story.