Woe is USD

Although financial market players are debating whether the US is facing a 'bumpy soft landing' or a recession into 2008, the prospects for EUR/USD are not simply a matter of economics and Fed policy. If the US economy is falling towards recession, the Fed is likely to shift to a stance of aggressive interest rate cutting, hoping that underlying dis-inflationary economic forces are more important than the one-off boost to inflation caused by commodity prices.

In such a situation, the Fed Funds

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