The resilience of the dollar should be taken as a signal that the green back is in the midst of a major uptrend. We see capital inflows based on US equity outperformance, slowing China reserve accumulation and the Fed contemplating how to wind down easing as all providing further support. We continue to stick to a bearish yen view, anticipating a further scaling up of the Abe administration’s easing policies. We are also bearish other safe haven currencies like GBP and CHF based on flow dynamics. For the rest of G10, we like long NOK/SEK and long CAD/NZD, while in Asia we anticipate yen weakness will spread to KRW and SGD, but are more positive on MYR. Finally, we think BRL, CLP, ILS and TRY offer good opportunities across the rest of EM, but are negative on HUF and ZAR.
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