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The problem of stagflation fears for the UK economy are now setting in, causing the GBP to tumble even though the terminal rate for GBP is now expected shy of 6% - a considerable increase from its current level.
As a massive week for major markets gets going, the USD is beginning to edge higher again. This comes after Friday’s US PPI data held up and there is further potential for a hawkish surprise at Wednesday’s FOMC. This is weighing on risk appetite too.
Looking back at the past week, it seems that most asset classes were stuck in their recent ranges, except for DXY which finally broke out of the range, closing above 102.
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