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Steve Englander predicts Fed rate cuts reduced to twice in 2019, with first cut likely in July. Market uncertainty prevails due to inflation concerns, affecting risk trade performance amid slow rate cut expectations. Englander says: "If you were to tell the market right now, cutting rates is out of the picture, we would see the risk trade a lot more poorly than it has so far."
Traders' belief that the central bank will have to hold rates at a higher level for longer has powered the buck to 10 straight weeks of gains.
The onshore yuan languishes around 7.32 per dollar, its weakest since 2007, even after the People's Bank of China intervened to curb the slump.
The dollar has weakened through much of 2023 amid falling expectations for further US interest-rate increases. It could extend its slide toward lows last seen in late 2020, according to Societe Generale.
The US dollar has rallied 2% over the past two weeks after opening 2023 on a long losing streak, powered higher by its safe-haven appeal.