Societe Generale Bank: If the Federal Reserve Holds Steady This Year, the U.S. Dollar May Remain Range-Bound

April 7, Reuters—Societe Generale analyst Kit Juckes said in a report that if the Federal Reserve keeps interest rates unchanged for the rest of this year as expected, the U.S. dollar could show range-bound fluctuations.

He noted that markets expect all G10 Group central banks other than the Federal Reserve to raise interest rates. Even so, among the G10 Group economies, only Sweden’s forecast growth rate this year is expected to exceed that of the United States.

These interest rate expectations limit the extent of the dollar’s appreciation. And if the Federal Reserve cuts rates significantly against a backdrop of high inflation and expansionary fiscal policy, the dollar is likely to fall.