HSBC 3 reasons to like the USD at the expense of EUR, GBP, AUD. Lower AUD range forecast.

<p>HSBC comments centre on the USD, their outlook for the Federal Open Market Committee (FOMC), and how thats going to play out for major FX.</p><p>In summary, analysts at the bank remain bearish on European FX, citing the central bank outlook, the geopolitical outlook, and domestic economy issues</p><ul><li>“As the gap between market pricing and central bank guidance remains wide, we expect USD strength to continue over the near term, notably against the EUR and GBP”</li><li>"Geopolitical risks will also carry scope to add further momentum to recent market moves" (strengthening US dollar)</li><li> EUR and GBP also face domestic economic challenges, for which a ‘high for longer’ rate outlook seems unlikely to offer sustained support for these currencies.</li></ul><p>HSBC also see similar for AUD, saying AUD overvaluation has built, and built, since November last year:</p><ul><li>AUD will likely fall further as markets trim back expectations of Fed rate cuts</li><li>HSBC cite fair value for AUD/USD ina wide, 0.6290 – 0.6667 range</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.