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FX Talking: Weatherproof markets

The desk believes that the current optimism in FX markets, particularly regarding the dollar, is ill-advised given the deteriorating economic indicators. Per the full note from ing-think, inflationary pressures appear to be spreading while growth prospects diminish, suggesting potential volatility ahead. The dollar may hold its strength temporarily, but a decline towards lower levels by year-end is anticipated. This sentiment contrasts the more bullish outlook seen in some circles, highlighting risks in current positioning.