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Fed hawks arguing in favour of another 25bps hike is generating support for the USD. A light US calendar this week will leave a mixed outlook on major forex.
There has been a shift in market sentiment over the past day. A decline in US bond yields has weighed on the USD and allowed risk appetite to improve. However, key barriers to the continuation of the improvement lie ahead.
As US Treasury yields begin to track higher once more, the USD is starting to strengthen once more. This is weighing on the rebound in equity markets.
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