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Q3 2023 Global Currency and Macroeconomic Outlook


Millennium Global is pleased to share its latest quarterly Currency and Macroeconomic Outlook.

This outlook shares our economics and strategy teams’ views on the macro themes that will matter most in the coming quarter and how these are expected to impact global currencies.


  • The economy has been resilient in the face of tighter credit conditions following the collapse of Silicon Valley Bank (SVB). Though we expect a continued moderation in US inflation next quarter, this resilience in activity should push the Fed to do a final hike in July.
  • An improvement in labour supply has helped the Fed bring the labour market closer to balance, despite lack of traction in reducing labour demand. But a realization from Fed that wages are only a small part of the inflation story should reduce their
    appetite to cause unemployment. Ultimately, this sets up the US economy for a soft landing.
  • However, a soft landing not only points to the Fed having little urgency to cut interest rates, but...
  • A soft landing brings conflicting dynamics for the dollar. On the negative side (dollar depreciation), lower inflation and resilient growth is supportive of risk assets, such as equities and commodities. But on the positive side, higher US rates erodes the interest rate convergence between the US and the rest of the world that is typically needed for broad dollar weakening.
  • Net-net, we stay neutral on the dollar, DXY (0) but generally have a pro-risk and carry bias:
  • We most like G10 cyclical FX such as...

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This piece of content  contains the views and opinions of our Global Economic Research and Strategy Team as of 4th July 2023 and does not necessarily represent the views and opinions of Millennium Global or any of its Portfolio Managers.

This information is intended for Professional Clients only, not retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful.

For further information please see Important Disclaimers here.

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