Foreign exchange markets have livened up in the past few weeks after a sustained period of slack, low-conviction range trading in the major currencies. The US dollar (USD) is weakening as investors note the slowdown in US inflation, a deceleration in the US labor markets, as well as tighter credit conditions, and consider how much more tightening in monetary policy the Federal Reserve (Fed) will implement from here. The answer, from our perspective, is likely not that much more. At the same time, resilient core inflation pressures are suggesting that European central banks will keep tightening over the next few ... (full story)