HSBC: The US dollar may rise in the short term, but the gains will be difficult to sustain

The market generally expects the Federal Reserve to announce a rate cut on Wednesday. HSBC's Paul Mackel said that unless the Fed signals that "more rate cuts are possible in the future," the dollar may see a brief rally after the announcement. He pointed out that the Fed would need to meet extremely high conditions to further boost already high expectations for a rate cut. Data from the London Stock Exchange Group shows that the market currently expects the Fed to have cut interest rates by approximately 140 basis points by the end of 2026. Against this backdrop, the dollar may see a short-term surge after Wednesday's announcement. However, Mackel believes that any gains in the dollar are likely to be temporary, given the prospect of faster rate cuts in the future, especially if employment data remains weak. (Jinshi)