Excellent approach HSBC!
HSBC - "It seems increasingly likely that the Fed will move to ease policy again soon. The precise nature and the timing of the easing remain uncertain, but there are good reasons to expect a move at the next FOMC meeting on September 13 (...) We expect the impact of new Fed easing to be negative for the USD. There
are two main reasons for this:
1. If the Fed moves to a new round of QE this may imply an end to the selling of short dated assets and this should allow US 2yr yields to ease lower which tends to undermine the USD.
2. Further Fed easing is likely to induce a further move towards 'risk on' market trading which will be negative for the USD.
Beyond the anticipated Fed move, the US will face difficult fiscal problems going into next year. In our view, it is time to stop worrying about the EUR and to start worrying about the USD."