After an 8% slide in the Bloomberg Dollar Spot Index this year, investors seem convinced the dollar’s pain is far from over. But HSBC (NYSE:HSBC) isn’t buying the euphoria. In a fresh note to clients, Paul Mackel and his team flag signs of what they call a growing anti-USD bubblea mirror image of the bullish dollar wave seen just a few years ago. With traders extrapolating recent weakness into the future, HSBC believes sentiment may be tipping into crowd-think territory.
The dollar’s fall has been fueled by U.S. tariff drama, rising global de-dollarization talk, and general unease around Washington’s policy direction under Trump. But HSBC notes that some of the initial catalystslike the shock from the April tariff announcementare now old news. What’s more, historical correlations between the dollar and U.S. yields are starting to re-emerge, which could be an early sign…
