A wide range of statements are heard at Davos.

Lagarde softly hinted at a June rate cut, while Swiss Central Bank Governor Jordan said that the strength of the Swiss franc had become strong enough to affect the inflation outlook.

Since inflation is fading, the Swiss Central Bank is likely to lead the race for future rate cuts. Will we see a weaker Swiss franc? The euro was sold yesterday, but there are no particular trends to be seen.

Fed Governor Waller led the rate cut path when he said in a speech on 28 November last year that the Fed could start cutting rates on the grounds of falling inflation. Since then, many Fed officials, including Chairman Powell, have shifted to the dovish side, and about six to seven rate cuts by the end of the year have been factored in.

Yesterday, however, while supporting a rate cut by the end of the year, he said that “economic activity and labour markets remain strong and we see no reason to cut rates as quickly or as hastily as before”. The market had been expecting a more hawkish line, so the ladder was removed. As a result, the dollar continued to rise, especially against the yen, closing around 148 yen.

The yen has been unilaterally sold off, but the statement by Director Waller does not mean that the US March rate cut has disappeared. The underlying strength of the US economy will continue, but the dollar is unlikely to break through ¥150 in one fell swoop. The question is whether it is time for the dollar’s rally to come to an end, or whether it will continue to rise towards ¥150.