The USD strengthened in March on the back of improved economic sentiment and rising bond yields. The QCAM FX BIAS product captured the USD rally well. However, is this the start of a new USD uptrend? Business sentiment surveys already signal new changes. Different cross currents are likely to result in a more mixed FX performance in April before a new trend emerges.
Economy and Interest Rates
First-quarter growth held up well despite the spike in Corona infections and growth forecasts for 2021 have been raised. However, there are significant differences by country and region, largely driven by the progress in fighting the Corona virus.
The USD strengthened versus all major currencies in March except for the CAD (the USD DXY was up 2.6%). Safe-haven currencies like the JPY and the CHF underperformed the most.
Going into more detail: Based on our proprietary analytical framework to take scalable exchange rate positions we are taking a close look on individual currency pairs.