HSBC: The US dollar may be nearing its bottom as the possibility of a rate cut by the Federal Reserve in 2026 is low.

HSBC Global Investment Research Department strategist pointed out in a report that the US dollar may bottom out in the first quarter of 2026 or earlier and then rebound. They believe that the Federal Reserve may cut interest rates again in December, but the probability of further rate cuts in 2026 is lower. According to Refinitiv data, there is disagreement in the currency market about a rate cut in December, but it is expected that by the end of 2026, there will be a total rate cut of 85 basis points. HSBC predicts that the euro will rise to 1.20 against the US dollar in the fourth quarter of this year and the first quarter of next year, and then fall back to 1.18 for the remainder of 2026.