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Andy Fately's avatar

Michael, the thing is, it is not clear to me that absent actual policy changes by the nations involved, they will be able to adjust the dollar lower. certainly the ECB and BOE and PBOC cannot raise interest rates, and it appears that the Fed will have a tough time cutting them, at least for now. so while they may talk a big game, unless the talk includes clear actions to intervene regularly (which I seem to doubt based on history, especially in the US) it is not clear to me what can break this link.

Now, if Powell does cut soon, especially with inflation still hot, then the dollar will certainly fall, while hard assets will rally. but I find it hard to believe that is the next move

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Michael Nicoletos's avatar

I address all this in my piece

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