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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.”