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Will the dollar rally last beyond the Fed minutes?
The US dollar has been rebounding in recent sessions. The big question is whether this is a sustainable recovery, or just a case of short covering that is likely to flounder once more as the bigger macro trends begin to re-assert? The chances are that the latter is going to be the case as the market remains concerned over the increasing burden of the ballooning US twin deficit. Market fears over rising inflation are clear with the market increasingly pricing in three rate hikes by the Fed this year. The US 2 year yield spiked higher yesterday on a $28bn auction of 2 year notes, but the focus now will be on the Fed ... (full story)