The US Treasury Bonds seem to have found some comfort today after the Supreme Court Judgment that the unique structure of the Fed can protect its members of the Board from being potentially removed by the president, reports Rabobank’s currency analyst Jane Foley.
You cannot discard short coverage in USD on a horizon of 1 to 3 months
“This will attenuate the possible credibility problems for the Fed, which will reduce inflation fears, at least until the end of President Powell’s mandate. That said, the weakness of this week’s USD shows that investors continue to reevaluate what was understood by ‘American exceptionalism’. For several years, the trade of ‘Buy America’ seemed to be a guarantee for many investors around the world.”
“This is no longer true, and the failure of the greatest yields of the US Treasury Bonds to boost the dollar this week suggests that investors continue to review their opinions about the risks facing the US economy Nervous to the bond market.
“That said, the prospects for US assets should be seen in the context of alternative investments outside the US market. It is possible that some of these markets are beginning to be overcomprated. Although we see the highest EUR/USD in 1.15 on a 12 -month horizon, we cannot rule out episodes of short coverage in USD in a horizon of 1 to 3 months. We predict the USD/JPY in 140 in 12 months, we see Risk of setbacks to 145 on a horizon of 1 to 3 months. “
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.
