Thursday, September 10, 2015

USD: More strength for the future – Deutsche Bank

FXStreet (Delhi) – Research Team at Deutsche Bank, note that the USD is likely to go strong in the near-term as US is enjoying the best productivity in the world.

Key Quotes

“The U.S. is a bright spot in that it has the best global levels of productivity. This should mean upward pressure on the broad USD even in the absence of strong US macro.”

“Simple broad measures of USD 5 year basis have been widening out over the last month beyond the levels of Q1. During that period, the influence was excess volumes of EUR liquidity creating a demand for USD swaps whereas today it is more likely to be outright demand for USD given the trajectory of growth and the level of global USD debt. The basis is by no means at acute levels but it suggests a drip drip tightening in global liquidity.”
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