G10 FX Talking: Back up in short term rates is a dollar positive

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We sympathise with the increasingly common notion that the currency will trend lower in 2024. Nonetheless, we believe that markets are mispricing a reduction in Fed rate as early as March, and a rise in short-dated USD yields may provide the currency some short-term breathing room. It's possible that rangebound trading in G10 may continue to be the norm for a little while longer.