In light of the fluctuations recently witnessed by the US Dollar Index, economists at HSBC have issued their forecasts for the dollar index for this year and next, where experts expect a weakening of the US dollar in the upcoming period coinciding with the nearing end of the US monetary tightening cycle.

Experts at the British bank indicated that for the dollar to rise in the upcoming period, there may be some supportive factors, but with the continued risk appetite, weak US economic data, ongoing global inflation deceleration, and economic recession in the United States and the rest of the world, the dollar may improve slightly, but it is expected to resume its downward trend this year and next.

Previously, coinciding with the weakness of the US dollar and its drop to its lowest levels since April 2022, which comes after weeks of the Russian invasion of Ukraine, experts at Societe Generale issued their forecasts for the performance of the US dollar index in the upcoming period.

In this context, Swiss bank experts believe that the markets expect US interest rates to peak, with further restrictions on raising US interest rates, and therefore, unless something happens to thwart these expectations—whether through another positive surprise in US growth or another disappointment in European growth—the dollar may continue to decline in the upcoming period.