The most likely outcome is that the Fed will increase interest rates by 0.25% to 1.75% next week, but the combination of low inflation and uncertainty over growth will give the Fed scope for a pause in interest rate hikes during the fourth quarter. A pause would lessen the potential for a dollar rally and any sign of a slowdown in consumer spending would also unsettle the US currency. There will be little enthusiasm for the Euro and the lack of confidence in growth prospects elsewhere will offer protection to the US currency. The latest capital inflow figures also suggest that dollar confidence should be sustained in ... (full story)