Currencies

There’s still greater demand for US dollars and USD-denominated assets but could the recent US banking issues hold bank the greenback’s strength?

Despite ongoing issues with banks such as SVB in the US, the market’s attention will still look at the Fed’s hawkish rhetoric as a reaction to a hot labor market and elevated inflation. But our FX traders still expect the euro to return to its previous bullish trend in the medium term.

The resilient US labor market and inflation will keep the US dollar strong against global peers. Challenges, however, abound for the rest of the year.

The US Fed hiked rates by 25 basis points, inflation is on a downward trajectory, the markets have priced in less aggressive moves by the Fed. Where will we see the peso going now?

For those watching the movement of the dollar-peso exchange rate, the recent strengthening of the peso, while desirable for some, may be fleeting.