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“Pivot” hopes keep the dollar on the back foot

The US dollar came under renewed pressure and is set to end the week lower against most major currencies. To a large extent, this weakness came in response to surprisingly strong durable goods data easing recession fears, as well as the minutes from the November FOMC meeting, which expressed that most officials now favour slowing the pace of tightening. But there was no consensus about the peak in the policy rate, an uncertainty which was underscored among other developed market (DM) central banks this week. While Sweden’s Riksbank slowed its pace of tightening, New Zealand’s central bank became the first among DMs this cycle to re-accelerate the pace of tightening amid continued strength in the labour market there.

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