FX weekly: A 20% stronger USD on the cards?

The price action in USD yields reminds us of the Swedish Eurovision winning song by Loreen: “We are going UP UP UP UP UP UP UP”. We have long warned of this move, why we are tempted to sing “Diggi-loo diggi-ley, life is goin’ my way, when I’m walkin’ in my golden shoes”.. Joking aside, The Fed almost surely thought that Wednesday’s message would lead to lower bond yields, but instead they ended up accelerating the long-end of the yield-curve (again). Central bankers simply don’t get market dynamics. The Fed wasn’t in any hurry to hike rates or taper its bond purchase program in March, as was broadly expected. … (full story)

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