In last Friday’s commentary we wrote about the ongoing rotation into the USD.

This trend is still being played out today. GBPUSD, for example, slumped to near 1.3400 at the time of writing, taking the correction from 1.43 to almost 1,000 bps. This is a fairly chunky move. The dollar is also strong against the Japanese Yen (above 110) and Euro (below 1.18), and a host of other emerging market currencies.

So how long will long-dollar strategy last? As long as dollar buyers are continuing to be found. Interest rate hikes this year will push US bond yields higher, thus attracting even more capital. Therefore we anticipate GBPUSD’s 1.33 support to be tested soon.

 

Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.

Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.

Jackson has a PhD in Finance from Durham University.