Dollar tests highs as global risk aversion remains elevated
The USD is testing the top of its range for over a year against the DXY major currency index, and its highs for the year-to-date against the broader Bloomberg dollar index against ten leading currencies. The rebound in the USD is surprising in light of the stronger than expected Chinese economic data. However, other economic reports suggest that global manufacturing and export growth remains weak; including flash April PMIs and export data in Korea and Singapore. Strength in the dollar reflects some risk aversion related to higher oil prices on USA’s Iran policy, Brexit risks, Italian government risks, and USA trade policy risks. US bond yields stalled, consistent with some risk aversion. However, US equities powered to new closing highs. (open PDF for more)
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