The US dollar’s ‘smile’ looks painted on


In demand: A currency exchange trader counts US dollar banknotes in Harare, Zimbabwe. The latest figures show hedge funds are still net short of US dollars. — Bloomberg

Only a return of more aggressive US Federal Reserve (Fed) easing speculation or a switch out of relatively expensive US stocks seems likely to wipe the US dollar’s smile off its face.

Currency markets still appear to be in thrall to the so-called “US dollar smile” – the model that posits two extreme scenarios which both tend to boost the US dollar.

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