Weekly FX Chartbook: Dollar to end 2023 in a bearish trend Weekly FX Chartbook: Dollar to end 2023 in a bearish trend Weekly FX Chartbook: Dollar to end 2023 in a bearish trend

Weekly FX Chartbook: Dollar to end 2023 in a bearish trend

Forex 5 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  A confirmation of the Fed pivot by Chair Powell could underpin a bearish dollar environment into the end of the year, with seasonality supporting the risk on move as well despite some pushback from other Fed members. Bank of Japan is a key event risk ahead, but markets will likely get quieter after that before 2024 could bring back a reality check on soft landing hopes and delayed pivots from ECB and BOE.


Dollar's move lower last week propelled gains in other currencies, with NOK leading the way on a surprise Norges Bank rate hike. Yen gains will be in focus this week as BOJ decision is due.
Momentum is most bullish for JPY but BOJ's pushback to exit expectations could weaken that before focus turns back to Fed. USD momentum likely to stay bearish into year-end.
Forex COT to the week of Dec 12 ahead of FOMC indicates further selling in USD to a net short positioning. EUR longs were cut, but fresh longs were added in GBP and short covering seen in yen, CHF and AUD.
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