Dollar likely to regain strength after Fed ends rate cuts: Standard Chartered

Dollar weakness seen in the market right now is likely to be short-lived, according to Steven Englander, Managing Director-Global Head of G10 Fx Research, & North American Macro Strategy at Standard Chartered Bank.“We don’t think the dollar is going to bounce back… until the Fed is done with its rate cuts,” he said, but added that a reversal is likely thereafter, supported by broader economic stability. However, any rebound will be moderate, just about 4–5%, as both supportive and opposing forces on the dollar remain in play.

Englander expects the dollar index to stay relatively range-bound in the near term, with no major upward or downward shifts. Much of the market’s focus will remain on the Fed’s next moves.

StanChart expects one rate cut this year, but does not rule out two cuts, even a 50-basis-point cut in September, depending on incoming data. Despite that, Englander does not foresee a prolonged easing cycle, stating that markets are a little pessimistic in pricing continuous cuts.

On the broader economy, Englander said the US is clearly slowing but not deteriorating sharply. Strong corporate earnings and rising productivity are offsetting job growth concerns. “It’s not going to be a 3% economy,” he said, but there’s no imminent risk of recession either.

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Globally, he believes much of the 2025 growth has already been front-loaded. Countries rushed exports to the US ahead of new tariff walls, which may now cause trade and export activity to cool down in the second half.

Still, Englander doesn’t expect the steep US tariff hikes to end the ongoing bull run. Solid earnings and some short-term fiscal stimulus should keep the momentum going.

Also Read: Rupee may slip to 87-88 vs dollar as US tariffs bite: ICICI Securities economist

As for India, Englander feels geopolitical concerns like trade ties with Russia are unlikely to shake long-term foreign investor sentiment. “There’s no upside to the US for not getting deals,” he remarked, suggesting global political noise tends to fade as market fundamentals take over.

For the entire interview, watch the accompanying video

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