PMI and other data released this week have added to evidence of the relative strength of the US economy amid a weakening global backdrop, shifting yield gaps in favour of the greenback and pushing it higher against most major currencies yet again. With inflation falling (but still above target) in many major economies, attention is increasingly turning to how central bankers will respond to the deteriorating growth outlook. Amid all this, Fed Chair Powell’s address at Jackson Hole earlier today was more balanced than last year but omitted any mention of rate cuts, helping to boost the dollar into the close of the week.
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