Historical analysis: Don’t sell the USD before the Fed is done hiking – Credit Agricole | Forexlive

Credit Agricole CIB Research warns from selling the USD before the official end of the current Fed hiking cycle.

“The recent banking sector turmoil has fuelled concerns about
aggressive tightening of credit conditions and intensifying recession
risks in the US. It has also forced the Fed to deliver a dovish rate
hike in March, seen by many as pre-announcing the end of its tightening
cycle in May,” CACIB notes.

“Our recent historical analysis of FX price action during the
past six Fed tightening cycles since 1980 has suggested that investors
should not sell the USD before the Fed is actually done hiking. Indeed,
it seems that the combination of ongoing Fed hikes and intensifying
recession risks tended to offer the USD a moderate boost on average” CACIB adds.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.