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#USD – Powell testimony keeps the Greenback under pressure


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