Fed cuts to drop DXY below 100 – DBS

The dollar index (DXY) will resume its depreciation in a lower 95-100 range by 2025 on the Fed rate cut cycle, notes Philip Wee, FX analyst at DBS.

USD to decline in the following year

“We have lowered our forecasts for USD and US interest rates.”

“Barring shocks to the global economy and financial markets, we see the DXY resuming its depreciation in a lower 95-100 range by 2025 on the Fed rate cut cycle.”

“This follows more than 20 months of consolidation in a range of 100-107 under the Fed’s ‘higher for longer’ rate stance.