美国经济可能会放缓，这是意料之中的，因为（美联储）已经实施了货币紧缩政策，但我们认为，7月份（非农）就业报告引发的衰退恐慌显然被过度夸大了（而且是短暂的）。The market expects the Federal Reserve to cut interest rates by a total of 100 basis points during the year, but HSBC believes that this dovish forecast is very aggressive, and the possibility of a soft landing still exists. Combined, the US dollar has fallen to its lowest level in half a year. HSBC believes there is still room for the dollar to rise during the year.
After the non-agricultural unemployment rate triggered a recession warning in July, recession transactions and interest rate cut transactions continued to alternate, and the US dollar's performance was weak in recent months. The majority of the market believes that as the Federal Reserve begins its interest rate cut cycle in September, the US dollar may continue to weaken. However, HSBC believes that the current exchange rate is undervalued compared to the US interest rate market, which indicates that the US dollar may soon rebound.
In a research report released recently, Daragh Maher and other HSBC analysts pointed out that market concerns about the US recession may have been amplified excessively. The analyst wrote:
The US economy is likely to slow down, which is to be expected because (the Federal Reserve) has implemented monetary tightening policies, but we believe that the fear of a recession triggered by the July (non-farm) employment report was clearly overexaggerated (and short-lived).
According to a series of recently released data such as retail consumption, the US economy is still expected to achieve a soft landing. The market believes that this will cause the Federal Reserve to cut interest rates at every next meeting during the year. One of them may cut interest rates by 50 basis points, for a total of 100 basis points during the year. However, HSBC stated:
Unless the economy actually deteriorates disastrously, the Federal Reserve's actual operations may not be as relaxed as the market currently expects.
Considering that the market's dovish expectations for the Fed's policy are already very aggressive, HSBC emphasized that the dollar's weakness may have come to an end. If the Fed's confidence in a soft landing increases, then the dollar may be supported by cooling expectations of interest rate cuts. The agency stated:
First, even if we accept the market's suggestion that the Federal Reserve may cut interest rates by 100 basis points before the end of the year, the dollar seems too weak compared to these dovish interest rate expectations.
Second, we don't think America's macro story will prove that this pace of easing is reasonable. Considering that there is no evidence of an impending recession, we don't think a 50 basis point cut in interest rates is necessary for a “soft landing” scenario.
Combining these two, and the fact that the US dollar index has returned to its December 2023 low, gives us reason to be bullish on the dollar.
The euro, yen, etc. are under pressure
Due to the market's aversion to the US dollar, the euro's recent strong performance. Recently, the exchange rate of the euro against the US dollar broke through the high in December 2023.
HSBC believes that although the ECB has a hawkish attitude, this support for the euro is limited, and if the dollar regains market favor, the euro may face pressure again.
HSBC anticipates that the EUR/USD exchange rate may fluctuate in the range of 1.1000-1.1276 in the next few weeks. At press time, the EUR/USD exchange rate was 1.1069.
Regarding the yen, HSBC indicated that although the exchange rate of the US dollar against the yen has retreated from its previous high, this adjustment may be over. With the market repricing the Fed's policy path, the dollar returned strongly, and the yen faced the risk of a pullback.
HSBC also proposed a trading idea to buy USD/CHF at 0.8490, with a target price of 0.8740 and a stop-loss price of 0.8390.
We decided to use our expectations of a rebound in the US dollar to manipulate the undervalued USD/CHF exchange rate. We believe that the Swiss franc has risen too high and too far recently; its strength has exceeded changes in interest spreads, and it is inconsistent with the cancellation of previous spread trading.
Since Swiss inflation is lower than the SNB's forecast, policymakers' tolerance for the Swiss franc's strength may also be limited. As two safe-haven currencies, the USD/CHF also removed some of the uncertain effects of the market on how the less dovish of the Federal Reserve might react to risk appetite.
