The US dollar once again demonstrated on Wednesday how interconnected it has growN with the general risk trade. The dollar was the top performer on the day while the Swiss franc lagged. Australian trade data is due later. We issue a new trade on GBPUSD with 3 supporting charts as the existing trade nears our stop.
FX correlations shift over time and sometimes even reverse. Throughout the crisis, the US dollar was the carry funding trade. Rates were at zero and the Fed pinning Treasury yields to the floor.