Credit Faraday Future: The market has already priced in the negative impact of the interest rate cut; the dollar may be undervalued.

According to ME News, on January 13th (UTC+8), Valentin Malinoff, Head of G10 FX Research and Strategy at Crédit Agricole, believes that given the market's muted reaction to the CPI data, traders should buy the dollar when it falls from current levels. The muted market reaction further confirms that many negative factors related to the Federal Reserve have already been priced into the dollar, as expectations of two rate cuts in 2026 have already been priced in. It is also worth noting that even with the recent decline in the dollar due to heightened concerns about fiscal dominance, the market has not anticipated the timing of Fed rate cuts. Therefore, the dollar's real interest rate advantage relative to the euro and pound sterling is not fully reflected and is undervalued. (Source: ME)