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Week Ahead: Little to Stop the Surging US Dollar
The dollar's Q4 rally continued last week. The Dollar Index has risen in the first eight weeks of the fourth quarter, gaining a little more than 7%. Half of the G10 currencies (the euro, the Swedish krona, the Norwegian and Danish krone, and New Zealand dollar) fell to new lows for the year last week. Part of the story is the paring of Fed cut speculation. The derivatives market no longer has even 50 bp of cut discounted between now and the middle of next year. The effective Fed funds rate at the end next year is seen near 3.90%. It was below 3% at the end of September. At the same time, developments in Europe and ... (full story)