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Week Ahead: Is the US Dollar's Downtrend Resuming?
The dollar appears at an inflection point. Its failure to draw much traction even as US rates rose may be an important tell. The US 2-year yield rose to a new multiyear high near 5.12%, while the 10-year yield set a new high for the year around 4.09% after the employment report. The dollar's broad gains in the second half of last month looks corrective. The underlying downtrend, which we argue began last September and October, looks set to resume. Moreover, the base effect warns of another large drop in the headline CPI on July 12. This coupled with the disappointing jobs report (209k and a downward revision of 110k ... (full story)