USD No Reservations

The USD weakened following a Middle East ceasefire, while gold is increasingly favored over the EUR as a de-dollarization hedge. Central bank divergence remains a key focus, with potential rate hikes from the BoJ and ECB contrasting with loose policy in Switzerland.

Key Takeaways

• 1.The USD was the weakest G10 performer (excepting CAD) during the Asian session following news of a ceasefire deal between Israel and Hezbollah.
• 2.Gold, rather than the EUR, is the primary beneficiary of the 'de-dollarization' theme and waning central bank demand for US Treasuries.
• 3.The Bank of Japan is increasingly likely to hike rates in June, though the JPY upside may be limited as an 80% probability is already priced in.

Table of Contents

• Asia overnight
• USD: no reservations
• JPY: even the BoJ is joining the fight?
• CHF: under control
• SEK: extended undershoot?
• Introducing RMA!
• Open trade recommendations
• Key events
• FX Research advanced tools
• Red Mount Analytics
• Global Markets Research contact details

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