US Dollar: HSBC’s strong-dollar outlook remains unchanged after FOMC hold

HSBC continues to favour a strong USD into 2027, while cautioning that the path could be volatile. Dated 2 November 2026, its FX Viewpoint examines the latest FOMC decision and the implications for the Dollar. Although the Federal Reserve left rates unchanged at 3.75-4.00%, it indicated that a December hike remains possible, describing US economic activity as strong and inflation as elevated.

Does the Fed’s hold reinforce Dollar strength?

"At its 27-28 October meeting, the FOMC voted 10 to 2 to hold the federal funds target range steady at 3.75-4.00%, in line with expectations."

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"The accompanying statement left the door open for a December hike."

"The USD is likely to face a bumpy road into year-end."

"We have maintained our strong USD view for several months, supported by US economic resilience, a hawkish Fed, and challenges facing other major currencies."

"That view remains intact as we head into 2027, although the path is unlikely to be smooth."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)