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Central bank surprises work against dollar ahead of FOMC

The US dollar looks poised to end another week down a touch – the DXY index’s first consecutive weekly fall since April. That probably reflects yield gaps vis-à-vis most other developed markets (DMs) shifting against the greenback as surprise central bank decisions in Australia and Canada have prompted investors to price in a “higher-for-longer” narrative across DMs, while a couple of soft US data points meant that Treasury yields failed to keep up.

 

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