Global FX: The weak dollar view passes a flow test

• Dollar undervaluation has closed in the past three months, but institutional Fed credibility news has not had a durable effect on the price.
• Concerns about exceptionalism in US equity market strength potentially pushing the dollar higher are countered by better growth not being US exclusive and the impact of inflation on currency.
• Despite large inflows into US equities in June, the dollar fell substantially, raising questions about the relationship between flows and dollar strength.

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