USD: Factoring in the risk of weakness - ANZ

Research Team at ANZ notes that since 2008 the USD has become a key determinant of the direction of most currencies and it is starting to look expensive.

Key Quotes

“Our sensitivity analysis suggests that commodity currencies are most vulnerable to any correction.”

“Other factors, such as risk appetite will limit the duration of this correction, but their impact will be relatively muted.”

“Overall, this means that the 2017 USD uptrend is unlikely to be as powerful as it was in 2013-2015. The ‘new normal’ is slower appreciation, with more frequent retracements.”