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A new way to look at the US dollar smile

With the Fed hiking cycle now almost complete, everyone in the FX market is trying to figure out when the Fed will switch to an easing bias and how the dollar will react. The widely-used "dollar smile" framework has been the go-to for understanding the dollar's response to a dovish turn but is it correct? In a report from Deutsche Bank today, a simpler framework is proposed, focusing on front-end rates and 'bad news' to explain the dollar smile. The key finding is that US rates tend to bounce ba... Read More

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Posted: Apr 19 2023, 18:21

Author Name: forexlive

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