Fed easing cycles tend to be accompanied by a weaker Dollar – SocGen

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As the end of the Fed’s hiking cycle gets closer, the Dollar becomes more vulnerable, Kit Juckes, Head of FX Strategy at Société Générale report.

“I might need another holiday sooner than planned, but f I’m patient, I should be able to go to the US and enjoy a cheaper Dollar.”

“Fed tightening has seen two-year yields rise above both the last cyclical peak and the one before that. That’s the root cause of volatility, which brings peak rates a lot closer. And while the Dollar sometimes peaks before rates, sometimes after the downtrend has started, the downcycle in rates usually sends the Dollar lower too.”

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