USD

The dollar is trading near a two-week high this morning as traders pull back on overly-optimistic monetary easing expectations and adjust positions amid heavy quarter-end rebalancing. The Canadian dollar, British pound, euro, and Japanese yen are all holding near the lower ends of their technical trading ranges, Treasuries are holding steady, and equity markets are licking their wounds after a modest pullback from record heights late last week. Swaps traders have 40 basis points in easing priced in for the final two Federal Reserve meetings this year, down from almost 50 after a series of cautious statements from policymakers, and...

After most Federal Reserve officials—with the notable exception of Stephen Miran—sounded a consistently-cautious and incrementally-hawkish tone in appearances during the early part of the week, the US dollar is staging a recovery against its major peers—including the euro, pound, yen, and Canadian dollar—Treasury yields are moving sideways, and North American equity futures are setting up for small gains at the open. Federal Reserve chair Jerome Powell didn’t rock any market boats in yesterday’s economic outlook speech. Speaking in Providence, Rhode Island, he noted that both ends of the central bank’s dual inflation and employment mandate are moving in the wrong...