Fed chair Jerome Powell’s senate hearing this week basically re-affirmed the market’s view of a July rate cut and subsequent cuts till the end of the year. Currently, the market is attributing a 20% chance of a 50bps cut in July but we think that is a low probability given that Powell sounded quite dovish and re-iterated the need NOT to fall behind the curve and suffer the vicious low inflation cycle like Japan and Europe. The greenback was under pressure vs its G-10 peers and ended the week on the back foot.
1. 5 day Spot Returns (%) G-10 FX vs USD
