Brown Brothers Harriman (BBH) reports that the Dollar has recovered within its multi-month range. Analysts expect the Dollar to hold within this range due to the Fed’s cautious approach to monetary policy. The report highlights structural bearishness for the Dollar amid concerns over US fiscal credibility and trade policies.
Dollar remains within multi-month range
“We expect USD to hold within the range that’s been in place since June 2025 because the Fed is in no rush to resume easing and the risk is the Fed cuts less than is currently priced in (50bps by year-end).”
“Structurally, we are bearish USD because of fading confidence in US trade and security policy, politicization of the Fed, and worsening US fiscal credibility.”
“The risk is the structural drags on USD outweigh the neutral cyclical USD backdrop and pull USD lower and further away from rate differentials, like it did in Q2 last year.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/usd-range-bound-outlook-amid-fed-dynamics-bbh-202601301408


