This is via the folks at eFX.
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- "It's clear the peak inflation narrative has been a big driver of the USD. Yet, an extension (lower) of the recent USD move will need growth to comply. Currently, the 3m move in the USD implies nowcast upgrades to around 80% of the sample. In reality, 59% of the countries has been downgraded recently. What's more, the soft landing scenario (priced into our risk model) doesn't square with the shift in earnings. The upshot is that while the US economy continues to cool, that won't necessarily drag the RoW down this time - at least for the next few quarters," TD notes.
- "That leaves US equities and the USD vulnerable to a large scale shift in capital flows, intensifying USD downside in Q2 and Q3," TD adds.
Weekly DXY chart, already significantly lower since Q3 past year.
