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Near-term respite for FX markets
President Trump's comments have shaken the FX ground once again. His criticism of (a) China and the EU for manipulating exchange rates; and (b) the Fed for hiking interest rates has reversed some of the US dollar strength (which had largely been generated by President Trump's trade policies). The near-term implications are that this should put a floor under EUR/USD and in the absence of an escalation in the trade rhetoric, should also be supportive for emerging markets FX. However, as the Fed policy path is set to remain intact for now (ie further gradual tightening, as per comments from St. Louis Fed President James ... (full story)