What currencies are punching above their weight? - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that they have looked at the performance of G10 currencies versus the US dollar to determine which currencies might be “punching above its weight” or lagging behind when assessed in terms of real yield levels and external positions.

Key Quotes:

"Of course other variables can play a key role also but in an environment of low volatility with other variables (for example: positioning, momentum, terms of trade) The yen is followed by NOK +10.1%; and then NZD +6.6%. At the bottom of the pack is the pound -11.7%; followed by SEK -1.4% and then CHF +3.2%. Over the period of this year, some of these ‘other variables’ I mentioned have of course been at play.

The unwind of the ‘Abenomics’ trade on BoJ policy concerns resulted in a short yen positioning squeeze while NOK’s performance reflects to some degree the terms of trade variable with crude oil prices up 28% year-to-date."