The dollar's failure to rally despite fading Fed cut odds and a 37bp firmer 12-month priced path reflects a still-stretched euro and yen short base absorbing the hawkish repricing through covering flow, not a dollar structurally capped.

What would prove it wrong

If the Dollar Index breaks decisively below its 20-day low of 100.5 even as Fed cut odds continue to fade and yields hold firm, the hawkish-hold repricing thesis fails.

Stated probability the thesis holds

60% · 10d horizon

Status

Standing

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This is the desk’s own dated record, settled against market data. Descriptive of a research thesis, not investment advice.