A quick snippet on views from Nat West on the US dollar against against EUR and yen
- core short term bullish view on the US dollar also remains intact
- Federal Reserve officials are turning more hawkish on the margin
- the greenback will make new one year highs through 1.13 against the euro and 115 versus the yen as the dollar keeps benefiting from its increasing carry returns
More detail on the yen:
- Significantly, renewed volatility in equities as 10Y US Treasury yields rise to seven year highs of 3.23% have not led to a stronger rebound in Japan's currency. We think the yen's ability to act as a safe haven has been eroded this year by Japan's narrowing trade surplus, strong M&A outflows and large buying of foreign equities by domestic investors. The currency is also at risk now from potential US trade sanctions.
