The US Dollar keeps moving up against the Euro and most developed currencies
After a busy week – and that’s an understatement – this week investors kept focusing on the impacts of Trump’s election at the White House.
As they sometimes do, assets classes have moved in their own way.
- Equities did not move that much and consolidated their rally. The risk/reward ratio looks unattractive to us, with rising rates eroding relative equity valuations.
- The selloff in US bonds that began last week (+37bps) carried on (+18bps). Markets deemed Janet Yellen’s speech hawkish, and that gave fuel to bonds vigilante
- Consequently, the dollar soared vs G10: +2.5% vs Euro and +3.6% vs Yen
Macroeconomic data was colorless and anyway markets are not focused on them these days.