Late cycle dollar strength meets the carry trade. I see two key themes driving FX markets in the near term. The first is central banks continuing to battle inflation, yield curves staying inverted, and the dollar continuing to hold gains. The second is cross-market volatility continuing to sink - generating greater interest in the carry trade. Expect these trends to hold into Fed, ECB and BoJ meetings next week. USD: Late cycle dollar strength continues. The recent surprise rate hike by the Bank of Canada (BoC) had a notable impact FX market. Naturally, the Canadian dollar strengthened as investors interpreted the ... (full story)