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FOREX: USD Driven Lower as Swaps Markets Price Three Full Fed Cuts This Year

FOREX
  • Running in tandem with the Fed pricing (as noted above, swaps now fully price in three rate cuts in 2024), the USD is weakening, adding to the GBP/USD recovery of post-rate cut lows, which now add to over 120 pips. EUR/USD now within range of unchanged.
  • USD weakness most well observed against CHF, which plumbs a new pullback low at USD/CHF at 0.8741 and tests next support of 0.8730. Moves come ahead of tomorrow's Swiss CPI, as well as the NFP report, which could keep focus on the pair, particularly as a lower-than-expected inflation print would put Swiss inflation on course to significantly miss the SNB's Q3 forecast. 
  • Currency futures volumes are uniformly higher across the board, making for a busy session: GBP over double the average for this time of day, JPY 8% above and EUR 43% above average.

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