According to analysts at Westpac US growth outperformance has of course defined the USD’s uptrend and from here on even more USD supportive outperformance will arguably need to come from a ratcheting down in global expectations.
Key Quotes
“The USD is in good shape: yield spreads vs the Eurozone are at thirty year wides and the already meaningful growth differential in the USD’s favour continues to expand.”
“But, the USD won’t have it all its own way. Strong growth has not translated into meaningfully higher wage and inflation pressures. Private sector wages and salaries may have hit a post-crisis high of 2.9% but not all measures of labour costs are accelerating uniformly.”
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