Thursday saw Bank of America Research note....>

FOREX: Thursday saw Bank of America Research note that "a key focus for FX

markets is whether the growth in (central bank) b/s has been systematically

correlated to FX. The evidence from the Fed and impact on the USD is that QE

suffers from the law of diminishing returns in terms of its impact on FX. QEI

from the Fed weakened USD, but subsequent iterations had a diminishing impact. A

similar dynamic has been observed in EUR & JPY. GBP is an outlier on its own

idiosyncracies. New generation FX has shown a more systematic correlation to the

rate of change in b/s. Since end-19, Canada has seen the most sig. pick-up in

B/S growth yet CAD is showing ltd correlation - we think this will change and

supports our bearish CAD view. The Fed b/s has also increased strongly & may in

part explain why USD has weakened through Q2. At a minimum, we think new

generation QE FX will show the same kind of persistent misalignment as the

veteran currencies. CAD/JPY has failed to recoup all of it losses as risk

markets recover and as the BoC injects massive amounts of liquidity. The key

variable to track will likely be the growth in money supply which we think will

be the key driver for relative FX performance."