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Forex and Interest Rate Outlook - September 2026
- Economic picture has been robust in the face of geopolitical shocks, but ongoing energy shock brings risks to the outlook
- US economy continues to outperform, with Eurozone and UK dented by higher energy prices and policy uncertainty
- Markets anticipate further rate hikes from central banks. However, the outcome could differ if inflation undershoots expectations
- Higher rate expectations supporting the dollar, but Fed policy outlook tilted dovish with new Chair
- Modest upside for the euro, while sterling could remain on the defensive amid fiscal policy uncertainty
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