The Real Story In FX Is Money Moving Out Of G2

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The top G10 currencies over the last week are those with most yield, NZD, AUD, GBP, CAD and the only big change in the last 24 hours is the performance of the Yen (yet again).

The real story though, is of money moving out G2, with EUR/USD somnolent, and heading to emerging market currencies that do still have some yield.

Unless yet another US soft path morphs into a serious slowdown, which is still unlikely on balance, that yield-hunting will go on bearing fruit and the best way to see it is in the way the DXY, narrow dollar index underperforms any of the wider ones (the chart shows Bloomberg’s), while both are tracking real US yields reasonably well.


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