The USD rebounded against on Tuesday with North American markets coming out of a long weekend. The correlation between rising US bond yields and currency strength had broken down this year, but it now back on track with the 10 year Treasury note hitting a 10 year high driven by higher inflation expectations. The Fed has been divided internally on how to proceed in a slow inflation environment, but if prices suddenly accelerate there will not be need for debate with a higher pace of interest rate moves expected from the central bank. The January Federal Open Market Committee (FOMC) meeting was seen as hawkish and ... (full story)