The Greenback tested a fresh 2024 high on Friday, aided by its “safe haven” status, but there was no follow-through, and if anything, it looked tired. The short-term gyrations of the US dollar are still likely to be determined by ongoing news flow out of the Middle East, and it’s likely to take a while before markets return to normal. As we said last week, volatility is likely to persist this FY.
- No change; we remain net bearish on the US dollar through 2024/5, but a “pop” towards 107 in the short term wouldn’t surprise us.
MM remains bearish toward the $US over the medium/long term
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The Yen continues to weaken. It hit more than 30-year lows last week, a move that still feels too early to fade. Japan’s currency isn’t helped by it being the lowest-yielding G10 currency and the country’s dependency on imported oil—the official BOJ interest rate is basically still zero.
- We can see the USDJPY pushing towards 160 over the coming months, i.e., a weak Yen.
MM is now neutral on the USDJPY
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