The US Dollar has rallied about 2% since the last FOMC meeting in September. Economists at ING are deferring their call for a Dollar sell-off this year.

Strong Dollar remains the only game in town

Even though November and December are seasonally weak months for the Dollar, it is hard to call a turn in the USD trend before year-end. 

US data is showing no signs of turning just yet. For that reason, it seems hard for the market to completely price out the risk of one last Fed hike before year-end. This should keep short-dated US yields anchored above 5% and prevent the Dollar from falling too far during any corrections.

Looking into 2024, our call for US economic and rate convergence with stagnant growth elsewhere in the world should mean the Dollar turns lower