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US Dollar Outlook:

Non-Major USD-crosses Look Bearish

You’ve heard it a lot in recent days: we’re in the midst of the worst month of the year for the US Dollar[9]. This point bears repeating because seasonal tendencies like earnings repatriation in Japan or Sweden can have a profound impact on cross-border foreign exchange flows. The macro mix of stable global bond yields, strong economic data, and falling volatility speaks to a growing appetite for risk. It’s against this backdrop that the seasonal tendency for US Dollar weakness is intriguing, as these are the conditions that typically favor US Dollar weakness during normal (e.g. non-pandemic) times.

Although given less attention than their major European contemporaries, a trio of USD-pairs warrant discussion (incidentally, two of the three pairs are minor components of the DXY Index). USD/CHF rates have been following US Treasury yields (similar to USD/JPY[10]), but USD/NOK and USD/SEK are acting like more risk-on/risk-off pairs. If April is indeed the worst month of the year for the US Dollar from a seasonal perspective, then it may remain susceptible to weakness over the next few weeks via this trio of European currencies.


USD/NOK Remains in Bear Flag; USD/CHF, USD/SEK Break Recent Uptrends

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currensceneFLOGO WHTsquareThough not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.

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