Coming into the year, investors were figuring out how they wouldtrade between two paths set on one side by monetary tightening fromthe Federal Reserve and, eventually, the Bank of England (BOE), andon the other by Bank of Japan and European Central Bank (ECB)easing.

Now, those investors are rethinking that divide as the U.S. andU.K. economies succumb to signs of a worsening global slowdown,forcing their central banks to rethink the interest-rate outlook.Any split now will be led by how much euro-area and Japaneseauthorities press ahead with looser policy.

The reassessment following a volatile start to the year suggestsa world economy still in need of synchronous and easy monetarypolicy if it is to escape the threats of low inflation and slowingChinese demand. It also means a review of the trade that propelledthe U.S. dollar higher.

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