MUFG says political, Fed uncertainty keeping risk premium in USD; carry trades gain
MUFG says the US dollar is holding onto a higher risk premium as investors weigh lingering uncertainty over a potential dovish shift in the Federal Reserve’s leadership and fresh concerns about political interference in US economic data. The caution comes despite a recent easing of trade policy risks.
The bank noted that last week’s US CPI data left the door open for the Fed to resume rate cuts as soon as next month, a prospect that has contributed to near-term dollar softness.
In FX markets, carry-trade currencies have been among the main beneficiaries, supported by an ongoing decline in market volatility. MUFG pointed out that key measures of FX volatility have dropped to their lowest levels in more than a year, further bolstering demand for higher-yielding currencies.
This article was written by Eamonn Sheridan at investinglive.com.Hence then, the article about mufg sees dollar under pressure as rate cut bets low volatility boost carry trades was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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