JP Morgan’s FX strategy team expects the US dollar to face mild downward pressure in the near term, driven by portfolio rebalancing and increased currency hedging—particularly from countries with large exposure to US equities.
In a research note, the bank identified Norway, Switzerland, Canada, Sweden, the UK, Australia, and Israel as having the largest US equity holdings relative to their own GDP. “Capital repatriation could be most consequential for their currencies,” the team said, flagging these economies as potentially more sensitive to shifts in global asset allocations.
While the bank does not anticipate large-scale capital outflows from the US, it sees “a modest USD depreciation” as the most likely outcome in the near term, partly due to rebalancing activity and a shift toward more active FX hedging strategies.
An equal-weighted real exchange rate index of the dollar against other G10 currencies suggests the USD remains elevated on a historical basis. “In the medium to long run, currencies have generally mean-reverted in real terms,” JP Morgan noted, though it cautioned that such adjustments typically unfold over several years or even a decade.
“Even if capital outflows from the US are quite modest, a cyclical moderation in the USD still warrants a rebalancing of FX hedges,” the note concluded.
---
DXY (a USD index) up
I didn't draw in anything, but a quick eyeball suggests to me the drop has work to do around here.
This article was written by Eamonn Sheridan at www.forexlive.com.Hence then, the article about jp morgan sees modest usd depreciation ahead amid rebalancing hedging flows was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( JP Morgan sees modest USD depreciation ahead amid rebalancing, hedging flows. )
Also on site :
- The Middle East war is testing the Gulf’s ambitions to become an AI hub
- Move over, seltzer. Non-carbonated drinks are taking the spotlight
- Meet Lamine Yamal, the Teen Soccer Star With a $100 Million Contract: Parents, Net Worth and Dating History Explained