Economists at Nordea analyze how the focus on cuts from central banks could impact the FX market.
When the Fed starts to embark on lower rates, the risk sensitive FX should start to do better against the USD
For FX, the relative rate changes on the way down will start to come into play.
When the Fed starts to embark on lower rates, the risk sensitive FX should start to do better against the USD. But we still think it will be a sideways bumpy road for the USD in the coming months with largely synchronised rate cuts for major currencies such as the USD, EUR and GBP.
Source: https://www.fxstreet.com/news/it-will-be-a-sideways-bumpy-road-for-the-usd-in-the-coming-months-nordea-202403261508