USD. USD Correction Largely Over. Bullish.
We believe the current USD correction is largely over and expect more USD strength, particularly against the low yielders. Yellen’s speech was important as it indicated Yellen was one of the median SEP dots supporting three rate hikes, keeping US front end rate expectations supported. In addition, US data has continued to come in on the strong side this week, with better jobless claims and inflation figures. Trump’s comments inject some uncertainty but, as we note in the overview, we don’t think this will change the appreciation trend of USD.