US DOLLAR OUTLOOK – EUR/USD, GBP/USD, USD/JPY
- The U.S. dollar has largely stalled its rebound, consolidating around the 102.00 level in recent days
- U.S. interest rates expectations shifted in a dovish direction last week, with traders pricing in nearly 160 basis points of easing for the year
- Dovish wagers on the Fed’s path could be scaled back if central bank officials started pushing back against Wall Street’s projections – a situation that could boost yields and the U.S. dollar
Most Read: US Dollar at Critical Juncture after US CPI, Setups on EUR/USD, USD/JPY, GBP/USD
U.S. interest rate expectations turned quite dovish last week even though December headline and core inflation figures surprised to the upside. The chart below shows that traders are now discounting almost 160 bp of easing for 2024, 30 bp higher than seven days ago. In this context, the U.S. dollar (DXY) has stalled…
