6-month forecasts for FX vs. the USD – greenback strength to persist to the middle of 2023

The report is long one. Its from last last week so this is a bit of a catch-up. In, very, brief:

• Given our view for more Fed tightening than financial markets are priced for as well as a slower pace of global growth, we believe the U.S. dollar can strengthen through until mid-2023. However, as the U.S. economy falls into recession next year and the  Federal Reserve 
  Federal Reserve
  
  The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the US while buttressing a financial system for the country. Its general duties are setting and guiding monetary policy and overseeing effective economic operation, both of which are at the service of the public interest.How the Federal Reserve Affects ForexThe Fed can materially impact the US dollar by virtue of the interest rate it sets, measured by the Board of Governors of the Federal Reserve System. The current interest rate and the expectations of future interest rate changes can influence the value of the US Dollar. For example, if traders anticipate a change in interest rates based on announcements from the Board of Governors, this can cause the US dollar to appreciate or depreciate in value against other currencies.Forex traders should always be aware of meetings and announcements from the Fed and should keep track of developments within the central bank.Ultimately, the Federal Open Market Committee (FOMC) holds eight regular meetings per calendar year, where policies and interest rates are discussed and agreed upon. The best course of action is to keep up with news ahead of these meetings as a forex trader to make predictions about interest rates, and whether to buy or sell the US dollar.
  
  The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the US while buttressing a financial system for the country. Its general duties are setting and guiding monetary policy and overseeing effective economic operation, both of which are at the service of the public interest.How the Federal Reserve Affects ForexThe Fed can materially impact the US dollar by virtue of the interest rate it sets, measured by the Board of Governors of the Federal Reserve System. The current interest rate and the expectations of future interest rate changes can influence the value of the US Dollar. For example, if traders anticipate a change in interest rates based on announcements from the Board of Governors, this can cause the US dollar to appreciate or depreciate in value against other currencies.Forex traders should always be aware of meetings and announcements from the Fed and should keep track of developments within the central bank.Ultimately, the Federal Open Market Committee (FOMC) holds eight regular meetings per calendar year, where policies and interest rates are discussed and agreed upon. The best course of action is to keep up with news ahead of these meetings as a forex trader to make predictions about interest rates, and whether to buy or sell the US dollar.
  Read this Term becomes one of the first major central banks to cut rates, we believe mid-2023 will be a cyclical peak for the greenback, and we expect the U.S. dollar to begin softening in the second half of 2023.
• In the G10, we are most optimistic on the prospects for the Canadian dollar. We believe the Bank of Canada will maintain a relatively hawkish stance on monetary policy, while elevated energy prices and relatively sound consumer finances are also favorable factors. In addition, we expect the Bank of Canada to hold policy rates steady even as the Fed eventually begins to ease monetary policy. We look for modest CAD strength against the dollar by mid-2023, the most optimistic view on any G10 currency.
• We expect the Japanese yen to be an underperformer within the G10 space. The Bank of Japan is not likely to tighten its accommodative monetary policy stance, including raising its cap on Japanese government bond yields, within our forecast horizon. As the Fed lifts policy rates and shrinks its balance sheet, these diverging paths for monetary policy should continue to place depreciation pressure on the Japanese currency.
• Prospects for the British pound have weakened as we expect a less hawkish Bank of England relative to financial market pricing. While inflation is elevated in the U.K., economic activity is decelerating amid high energy prices and declining purchasing power. As the BoE underdelivers, the British pound should weaken sharply over the remainder of 2022 as well as into next year.