Despite making up some ground today, the dollar seems set to end the week somewhat lower against nearly all major currencies. Banking turmoil in the US and elsewhere appears to be receding (for now), with the latest Fed data confirming emergency facilities were less actively used than in the prior week. This puts central banks’ fight against inflation back on centre stage. On that front, monetary policymakers outside of the US seem more willing to press ahead with tightening than the Fed, and we think relative interest rates are unlikely to benefit the dollar over the short term.
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