HSBC-Currency Outlook：House of cards-240622

By:GlobalFXResearchCurrenciesGlobalCurrencyOutlookJune2024Houseofcardswww.research.hsbc.comThemarketwasvotingagainsttheUSDrecentlybutwestillseeitwinningtherace.ElectionsandmarketvolatilitysuggestwhatcouldlieaheadInthisedition,weupdateourforecastsanddiscusstheimpactoftheUSandUKelectionsontheUSDandGBPrespectively,aswellasoutlineourthinkingontheJPY,RMBandAUDPlayvideowithPaulMackel,DaraghMaherandJingyangChenDisclosures&Disclaimer:ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.Currencies●GlobalJune2024Currencies●GlobalJune2024SummaryOverview:Houseofcards(pg2)ThemarketwasvotingagainsttheUSDrecentlybutwestillseeitwinningtherace.Electionsandmarketvolatilitysuggestwhatcouldlieahead.IndependenceslayattheFed(pg7)AsecondpresidentialtermforDonaldTrumpcouldseethequestionofFedindependenceresurfaceintheFXmarket.TheabilityofaUSpresidenttoaltertheFed’scompositionswiftlyandmateriallyislimitedbylawandlikelyalsobypoliticalrealities.PresidentTrump’scriticismofFedpolicyandastrongerUSDdidnotmovethecurrencymarketmateriallyduringhispreviousterm.GBP:Labouringthepoint(pg15)SomebelievetheUKelectionwillbeGBPpositivebutwearemoresceptical;theBoE’smonetarypolicyoutlookmattersmoreforGBP.GBPwillfacealeadershipchallengeinthecomingmonths.JPY:Snail’space(pg19)...