QNB Predicts Limited Downside for Euro in 2024 Despite EU Sluggishness
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#36b7da54 ver:0.26
The start of 2024 FX trading has seen a modest reversal of the pro-risk trends that dominated late last year. The market seems to have priced in the speed and magnitude of rate cuts for this year too quickly. The soft landing playbook could see a temporary reversal if the December US jobs report comes in strong. A backup in short-term rates could be mildly dollar positive and risk negative, but this should be a correction. The first rate cut is expected in May. Money markets are currently pricing in 16bp of easing in March, leaving room for further backup in short-term rates. High beta, pro-cyclical currencies that performed well during last year's rally may continue to give back some gains. The G10 FX under-performers since the correction in short-term US rates have been the high-beta Sca...
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