Greenback broadly flat as DM easing cycle gathers pace

Despite more central bank policy announcements this week, most currencies fluctuated within a tight range and the dollar seems set to end the week broadly flat – boosted a bit by the release of PMI data earlier today. Our sense is that this may remain the status quo in the near term: while developed market (DM) central banks may vary in the timing of the start of their easing cycles, the bigger picture is that the next move in policy rates (outside of Japan) will be lower and that the Fed should be among the last major DM central banks to cut rates. This – along with continued US outperformance in equity markets – should keep the greenback firm in the short term.