Chris Turner, the Head of FX Strategy at ING, notes that the market currently prices the first full 25 basis point cut from the Federal Reserve at the 10 June meeting. 

"And listening to the Fed’s Richard Clarida last night ("it is too soon to even speculate about the size and persistence of these effects"), it seems the Fed is in no hurry to act. 

However, there seems little tolerance in the US for sharp falls in equities and were US equity benchmarks 15% off their highs, versus 7% off their highs now, the Fed might seriously consider pulling the trigger at the 18 March meeting. 

That is the signal coming from US bond markets right now, where US five-year Treasury yields could be the first part of the curve to hit the 1.00% threshold. We think lowered global growth expectations, flatter yield curves and expectations that President Trump retains the White House are all dollar positives. 

Yet an extreme US equity sell-off that would prompt an early Fed cut could be a short-term dollar negative. The balance of risks suggests DXY holds 99 support."