HSBC Warns U.S. Dollar Appreciation Could Be H2's Largest Pain Trade

According to HSBC, on June 30, the bank warned that sharp U.S. dollar appreciation may become one of the second half's largest pain trades. HSBC forecasts the dollar will gradually strengthen before the first half of 2027. The bank cautioned that if the Federal Reserve signals a more hawkish stance than currently priced in and geopolitical tensions escalate, dollar gains could turn into explosive appreciation. The dollar has already strengthened against all major currencies over the past two weeks.
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