Looks like we are in another flight-from-quality…
They can’t get enough stocks (US indexes are at 52-wk highs except for the S&P), emerging markets (real at 2.5 year highs) and high-yielding currencies like AUD.
Of note, the pound is clawing back a chunk of its recent losses against the euro earlier this week. Stagflation in the UK had been a big drag on the pound but interest to buy it against the JPY has been overwhelming in recent days.
Broadly speaking, EUR/GBP tends to track EUR/USD and both pairs have stalled recent rallies despite clear signs the ECB intends to initiate a series of rate hikes. If EUR/GBP continues to decline, it could be a leading indicator for a revival of the dollar’s fortunes. Cable trades near session highs of 1.6080.