With uncertainties clouding global growth, especially in powerhouse economies like China, the US real estate market may become an even more attractive proposition for foreign investors. According to Rai, economic pressures could particularly affect China’s primary trading partners, including Germany and Australia.
Additionally, the analysts pointed out potential liquidity challenges in the US financial system, as indicated by bank reserves and reverse repurchase agreements, factors that might bolster the US dollar. Such actors might further reinforce the US dollar’s strength.
“The drop in RRP of late suggests that the beta to UST issuance is still high — and that we could be in store for further declines with an abundance of Treasury supply still incoming,” Rai said.
London-based HSBC has also revised its outlook, now estimating the euro to drop to $1.03 by the first quarter of 2024.
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Source: mpamag.com