US Dollar: Will Near-Term Support Give Way to Weakness Later? – ING

Support for the US Dollar (USD) should persist into early 2027, according to ING’s Chris Turner, with robust US growth, inflation above 3% and a hawkish Federal Reserve providing the underpinning. As headline inflation eases towards the Fed’s 2% target, however, he expects short-dated US rates to move lower.

Can the Fed’s stance keep the Dollar supported into 2027?

"The dollar should stay supported by strong US growth, high inflation and a Fed threatening to tighten before weakening next spring as inflation falls."

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

"Our base call assumes that the Federal Reserve stays hawkish in the first quarter, as decent US growth and above-3% inflation keep money markets pricing in the threat of an extended tightening cycle."

"That turns in the second quarter, when energy-driven base effects drop out of headline inflation and a return to the Fed’s 2% inflation target sees short-dated US rates move meaningfully lower."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)