HSBC Describes Dollar "Fragility" – The Trump Factor and the Fed Attack Weight on DXY

[Igor Pereira]

When a conservative banking giant like HSBC changes its perspective to "sale," the market listens. The bank has just issued a clear alert: The US Dollar must remain among the worst-performing currencies in the medium term.

This analysis validates our thesis that political uncertainty in the US has ceased to be "noise" and has become "structural risk".

By Igor Pereira Financial Market Analyst

The bank went straight: the prospect for the dollar remains fragile.

• The Reason: The growing uncertainty surrounding US policies. The market hates indecision, and the political risk premium is being discounted on the value of the currency.

• Trend: The bank notes that the dollar has suffered "remarkable pressure" in the last two weeks. This is not a technical correction; it is a reassessment of fundamentals.

HSBC explicitly points to President Donald Trump's return to the political scene as a catalyst for volatility.

• Geopolitics: The more aggressive and unpredictable "geopolitical risk management" style (as we have seen with tariffs/Greenland) creates oscillations that drive away foreign capital seeking stability.

• Uncertainty: The market is unable to price the six-month scenario ahead, which leads to a coin escape with clearer policies or to Gold.

This is the most dangerous point mentioned by HSBC and connects directly with our previous analysis of the court dispute involving Lisa Cook and Jerome Powell.

• The Risk: "Crescent attacks on the independence of the Federal Reserve."

• ExpertFX Reading: If the market believes that the Fed has lost its autonomy and that interest will be dictated by the White House (to finance deficits or artificially boost GDP), the credibility of the Dollar as a value reserve evaporates. A politicised Central Bank is the nightmare of any holder of debt securities.

The "American exceptionality" that sustained the strong Dollar in recent years is being eroded by internal conflicts.

My Vision: The HSBC report is a green light to continue betting against the Dollar (Short DXY) on rallying.

1. The Recipient: A structurally weak and unstable dollar is the perfect scenario for the Gold, Silver, Platinum, Copper and Paladium.

2. Foreign currencies: Stay tuned for purchase opportunities in coin commodities (AUD, CAD, BRL) who tend to value themselves when the Dollar weakens globally.

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