HSBC prioritizes trade policy over monetary policy for USD

HSBC recently shared insights on how U.S. trade policy could affect the value of the U.S. dollar more than monetary policy. The bank emphasizes the importance of monitoring trade decisions made by the Trump administration. The Federal Reserve held a meeting in March, which resulted in a stable outcome. This did not change the general negative outlook for the dollar, especially as U.S. bond yields fell. However, the meeting did not cause a major drop in the dollar's value. The Federal Reserve is taking a careful approach to interest rates, indicating that any changes will be gradual. HSBC has maintained its forecast for the 10-year U.S. Treasury yield at 3.50% for the end of 2025. HSBC also noted that U.S. stock markets might see further declines. Despite this, some market indicators suggest that conditions may be oversold, indicating potential opportunities for investors.