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The risk-on sentiment in financial markets over recent weeks has also impacted currency markets. The USD is generally weaker, but not versus safe-haven currencies like the JPY. This may be a short-term trade but we see first signs of a potential trend change towards a weaker USD.
Global economic activity hit an inflection point in May as Corona-restrictions were gradually eased. North Asia leads the recovery followed by Europe and the USA, while other Emerging Markets, notably in South America, are lagging behind.
The USD fell across the board over the last month as risk assets rallied. The notable exception was the JPY, which underscores the risk-on sentiment of the market move.
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.