Westpac's analysts note that the U.S. dollar is currently broadly unchanged from a month ago despite the market pricing in yet more policy easing by the FOMC.

• “The federal funds rate is now expected to be reduced by 108bps before November 2020 versus 89bps at the time of our June Market Outlook.
• This resilience in the US dollar is, in part, due to its role as a safe-haven and the persistence of global trade and geopolitical tensions – even after the US/China agreed to a truce in Osaka. At least of equal significance however is the fact that the FOMC is now not the only central bank ready to ease policy. Most notable is that the ECB intend to follow suit.
• The rub for the ECB is that they have less scope to ease given their policy stance is extraordinarily easy versus a broadly-neutral FOMC. As a result, against 50bps of cuts from the FOMC in late-2019, we only look for a 10bp cut in the deposit rate from the ECB. Beyond that, the ECB needs to establish they have capacity to ease further.”