6 Key FX Takeaways from 2020

March 23rd, 2020 probably marked a multi-year peak for the US dollar’s broad trade-weighted index. USD Indices generally move in 7-10 year cycles, and this cycle started in April 2011, and on March 23rd was 2.25 standard deviations above it's 10 year average.

The middle quarters of 2020 had the perfect set-up for USD depreciation – with lower US real yields and an upturn in global growth expectations. The former have stopped moving against the USD so could a short-term bounce in the narrow DXY index from current levels be possible?

The note also discusses EUR’s ‘safe haven’ characteristics and other FX trade ideas.