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20 May 2014
weakness is building up around the USD - Investec
FXStreet (Barcelona) - Jonathan Pryor, Corporate Treasury Analyst at Investec, remarks the fragile context of the USD as of late.
Key Quotes
"The USD was unable to build up momentum and continues to pull back from last week’s the highs which followed the ECB meeting, with question marks of real confidence in the US economy being reflected in the falling US bond yields. After peaking at just over 3% in January as the market priced in a strong US recovery, the poor data start to the year and the recent inability to bounce back after the weather cleared up has seen bond yields drop through 2.5% to support around 2.46%."
"This declining yield goes a long way to explain why the USD has been a less attractive investment for investors, especially against some emerging market and higher yield G10 pairs that have recovered well since sell-offs earlier this year. This level should be watched in the coming weeks as an indicator for further USD moves, whether it is another leg lower through here and further USD selling, or a data-led bounce in yields that could see the USD finally find favour in 2014."
Key Quotes
"The USD was unable to build up momentum and continues to pull back from last week’s the highs which followed the ECB meeting, with question marks of real confidence in the US economy being reflected in the falling US bond yields. After peaking at just over 3% in January as the market priced in a strong US recovery, the poor data start to the year and the recent inability to bounce back after the weather cleared up has seen bond yields drop through 2.5% to support around 2.46%."
"This declining yield goes a long way to explain why the USD has been a less attractive investment for investors, especially against some emerging market and higher yield G10 pairs that have recovered well since sell-offs earlier this year. This level should be watched in the coming weeks as an indicator for further USD moves, whether it is another leg lower through here and further USD selling, or a data-led bounce in yields that could see the USD finally find favour in 2014."