HSBC Predicts Dollar Rise If Federal Reserve Cuts Rates

According to Odaily, HSBC has indicated that the US dollar might strengthen if the Federal Reserve reduces interest rates by 25 basis points on Wednesday and signals a gradual easing of policy. Paul Mackel, a foreign exchange analyst at HSBC, mentioned in a report that it is currently challenging to predict whether the Federal Reserve will cut rates by 25 or 50 basis points. HSBC's economic forecast suggests that the Federal Reserve will start with a 25 basis point cut while hinting at further, albeit limited, policy easing in the future. Mackel noted that this scenario would place the dollar on a 'better footing,' especially considering the market's overestimation of rate cuts and signs of excessive short positions on the dollar.