"The carry of holding dollars is far juicier," he said, while policymakers' rhetoric has also made traders nervous about inflation and the risk rate cuts would be distant or small. Traders have pushed out the timing of the first Fed rate cut to December. Thursday's business surveys from S&P Global supported the conviction among many traders that the Fed may keep rates higher for longer. But not for traders who are positioned for Fed cuts. Rates markets still price a near 90% chance the ECB cuts rates next month.

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Persons: Martin Whetton, Matt Simpson, Sterling, Christopher Waller Organizations: U.S, Westpac, Federal, Traders, P Global, European Central Bank, Federal Reserve Locations: Sydney