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FX: A US dollar decline is delayed, not deterred
The FX market continues to be an extension of market expectations on Fed policy. The latest data on US jobs and inflation led investors to price out cuts before June and to reduce the anticipated easing package to 75-80bp. The month of February has seen a 50bp bump in the 2-year USD swap rate, which is trading around 4.55%, the highest since November. So, the dollar has become even more expensive to sell, and dollar bears are now on the hunt for more conclusive evidence on US disinflation/hard landing. That evidence is currently pointing in the opposite direction, at least when it comes to hard data, and this looks ... (full story)