Currencies

The $US made fresh 6-month lows last week taking its correction to ~10%, the currency has taken its lead from bond yields as opposed to the Fed’s hawkish rhetoric. As we’ve discussed over the last few months investors/traders have been positioned very long in the $US hence its recent sharp correction but we believe this is starting to become extended and a period of consolidation is on the menu into 2023.

• The $US feels like it’s looking for a low which would create a headwind for commodity prices in the short term.