Strategy Video: The Next Two Weeks are Critical for USD Trend and Pace

Talking Points:

• The Dollar is the best performing major and on pace for a record breaking 7-month bull run

• Monetary policy - the primary driver thus far - will be put to the test between Fed and ECB decisions

• Risk is where most of the potential rests, but will data or a critical theme prove the ultimate spark?

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The Dollar is pacing an FX market that is growing increasingly volatile and unpredictable. Well on pace for its seventh consecutive monthly advance (what could be a record for the benchmark), important trials stand before the currency. In the next two weeks, the docket fills out with critical event risk for the Greenback and broader financial system. Between ECB and Fed rate decisions, speculation supporting a future US rate advantage will be put to the test. Yet, far greater potential for the Dollar resides in deteriorating risk backdrop, which can be set off by high-profile data like US GDP or even monetary policy itself. We look more closely at what lies ahead for the Dollar in the second half of January in the weekend Strategy Video.

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