The Greenback broke out to a fresh 2024 high on Friday, as its “safe haven” status attracted plenty of buying into the weekend as well-founded fears around Iran gathered momentum. The short-term gyrations of the US dollar are likely to be determined by ongoing news flow out of the Middle East, and it’s likely to take a while before markets become fully calmed. Volatility is likely to persist this FY.
- No change; we remain net bearish on the US dollar through 2024/5, but a “pop” above 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 Euro fell away on Friday in line with the strong US dollar. The downside momentum looks likely to extend further as the appetite for “safety” remains. However, the risk/reward would be appealing if we see a washout on the downside below the 2023 1.045 lows. In a similar fashion to the Nikkei mentioned earlier, this would generate a risk/reward “buy trigger” for MM.
- We can see the Euro spiking down towards the 1.04 region, where we would be keen buyers.
MM is bullish towards the Euro medium/long term
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