The US dollar (USD) shows divergent behavior against its counterparts depending on its risk profile, according to BBH strategists.
While it mainly falls against commodity currencies due to improving global growth prospects, it rises against safe-haven currencies such as the Japanese Yen (JPY) and the Swiss Franc (CHF).
Tale of two dollars
“The USD is under bearish pressure especially against commodity-sensitive currencies. NOK, SEK, AUD and NZD are the top performing major currencies against the USD this week. China's modest cyclical recovery and improving momentum growth in the global manufacturing sector (the global manufacturing PMI hit a 20-month high of 50.6 in March) bodes well for the commodities complex.”
“USD remains firm against low-yielding currencies (JPY and CHF) underpinned by elevated US Treasury yields.”
“The slowdown in US service sector growth in March has kept the odds of a Fed rate cut in June (over 60%) and dampened the overall strength of the USD.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
