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HSBC: Interpretations of the Fed's political leanings could determine the dollar's trend.
[HSBC: Interpretation of Fed's Political Leaning May Determine Dollar Trend] Paul Mackel, Global Forex Research Head at HSBC, stated that the trend of the dollar may depend on the market's interpretation of the Fed's political leaning. There is uncertainty regarding the Fed's next monetary policy moves and the selection of the next Fed Chair. If the Fed can gradually lower interest rates, this would support HSBC's core view that the dollar will gradually weaken against multiple currencies. However, if the market begins to worry about political interference in the Fed, the dollar's trend may differ, depending on changes in cross-asset volatility and the movement of US long-term bond yields. In adverse situations, the dollar may initially weaken against key currencies such as the euro, yen, Swiss franc, and renminbi.