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US Dollar Correction to Continue
Sterling was the only major currency to have a worst week than the US dollar. Prime Minister May may have secured the wording for an agreement in principle with the EC and managed to get a majority of the cabinet to support it, but seems increasingly unlikely to pass the last hurdle, Parliament. US President Trump dangled the possibility of easing trade tensions with China in front of investors who were primed to take the bait. Expectations of the trajectory of Fed policy next year is in flux. The implied yield of the December 2019 fed funds futures fell 15 bp last week to 2.75%, the lowest close in ten weeks. ... (full story)