Credit Agricole predicts limited short-term USD decline

Credit Agricole reports that the U.S. dollar (USD) is unlikely to weaken significantly in the near term. The bank cites three reasons: the unwinding of the "Trump trade," overblown fears of a U.S. recession, and overly aggressive market expectations for Federal Reserve rate cuts. The USD has returned to pre-election levels, indicating that political risks are now priced in. Additionally, concerns about a U.S. economic slowdown may be exaggerated, with upcoming data potentially stabilizing the dollar. Finally, the market may have misjudged the Fed's willingness to cut rates. The upcoming March Federal Open Market Committee meeting could challenge these expectations, supporting the USD.