The USD is experiencing a bullish breakout driven by hawkish Fed policy signals and monetary divergence. MUFG maintains a long USD/NOK position while monitoring risks to the global growth outlook from energy price fluctuations.
Key Takeaways
- 1.The USD is strengthening due to hawkish Fed policy updates and expectations of monetary policy divergence.
- 2.Falling energy prices are reducing inflationary pressures and influencing central bank policy expectations outside the US.
- 3.USD/NOK remains a maintained long trade idea given higher US rates and correcting energy prices.
Table of Contents
- Bullish break out for USD in anticipation of monetary policy divergence
- USD: Diverging monetary policy expectations trigger bullish break out
- Weekly Calendar
- Key Events
- Open Trade Ideas
- FX Portfolio
- FX Positioning
- FX Options Market Flows
- METHODOLOGY
- HEATMAP ANALYSIS
- Disclaimer
- CERTIFICATION
- LEGAL ENTITIES AND BRANCHES
- GENERAL DISCLAIMERS
- COUNTRY AND REGION SPECIFIC DISCLAIMERS
Document Preview
Access the Full Report
Get unlimited access to institutional research reports with a 14-day free trial.
Authors
Lee HardmanAbdul-Ahad Lockhart
Securities
USDNOKBrent Crude
Themes
Energy price shock reversalFed policy independenceMonetary policy divergence
Regions
Asia PacificEuropeMiddle EastUnited StatesIranGermany