Free Trial

BofA Look At The USD And Risk-Off Dynamics

USD

Bank of America note that “USD has optically benefited from the sell-off in equities since August. But we this risk-off dynamic is less evident under the hood.”

  • “USD's beta to stocks has moderated, especially vs. cyclical sectors, rates explain a larger part of USD appreciation than equities and USD skew has not meaningfully widened during the latest risk-off episode.”
  • “High U.S. yields constrain USD gains during risk-off given less use as a funding currency for carry trades, as well as the pricing of Fed rate cuts when the shock is U.S.-specific.”
  • “Watch the relative performance of U.S. services vs. manufacturing as a proxy for U.S. centric growth deterioration and peak USD - we do not expect this until 2024.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.