BNY’s Geoff Yu argues that the US Dollar remains undervalued in real effective terms despite recent gains in USD/JPY, EUR/USD and USD/CAD. He notes that Eurozone growth and inflation have softened while U.S. price dynamics strengthen, supporting further appreciation in the Dollar’s REER.
Deutsche Bank Research reports that the S&P 500 and Nasdaq fell last week in a global tech sell-off, with the Magnificent 7 entering correction territory. Chipmakers led the weakness as the Philly Semiconductor Index slumped despite Micron’s revenue beat.
MUFG’s Lee Hardman and Abdul-Ahad Lockhart note the US Dollar (USD) is trading close to year-to-date highs as markets debate whether the Federal Reserve (Fed) will follow its hawkish rhetoric with actual rate hikes.