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DXY is about to go higher?

My thesis for the first quarter of 2021 will be for USD to go higher. My main reasoning is higher 10Y treasury yield. Of course the Fed can do YCC to tame it down. My bet is as long as there is no material shock to the S&P, they will allow yield to drift higher, especially after Biden's massive fiscal plan. Let's assume it will pass in some shape, way and form.

My second reasoning is extreme positioning. Tom, Dick and Harry's brother in laws are short of USD. Normally, it reverses when the positioning is this extreme. I wouldn't even be surprised when ECB,BOJ are starting to jawbone their own currency.

As this is my first post, I keep it short and sweet. Any thoughts? feel free to chime in

10 Y yield
10 Y yield

The Exchange Weekend Trend Update: Is the US dollar Index the best way to put on a currency trade?

The DXY or US dollar Index is often brought up as a way to play currency fluctuations, particularly as a "safety trade". In this video, I take a look at how the DXY did in the Corona Panic of Q1, 2020 and how it's done since as compared to some other individual USD pairs available in futures form. As a trend follower, I track all the major USD crosses and don't follow the DXY. I see a benefit in the diversification, and as my video shows. There are extra returns to be had both in risk off, and risk on market regimes looking at individual pairs vs DXY. @Weston Nakamura this seems right up your alley and I'd like to know what you think is the best way to play currencies in risk on/off situations. 

APAC Thursday 12/10/2020

Interesting day today. Mixing it up a bit. Funny my morning out on the water was the same if not crazier.

The Aussie market is doing its own thing, with some strong defined flows today. Started off just holding the line, which was a bit counter the US lead, and contrary to weaker Nikkei futures, and BTC up a touch ($100).

Then the move seemed to coincide with the RBA Bulletin and coincidently we had a dump from passive selling – matched by equally strong active buying. So some hedging tricks going on.

Bounced, but faded that bounce as you would expect with passive dominance – and a bit of a reverso for the new context: Nikkei recovered some ground to be positive, BTC reversed to be down about $100, and the $AUD and AUDJPY up strongly – for our session it is a good size move, the AUDJPY up 0.5%. Keep an eye on this. USDJPY up a touch too, and the Pound down (Brexit fake outs).

Into the close the Nikkei took off more, up 0.4% and HK has been higher two days in a row, it was up 0.6%. (Held that into our close - US futs flat).

Yet the SPI relaxed back down (passives again) weaker into the cash close, steady on day close. Flows as exp (happy with that).

You could say the active buying was stronger than the passive selling, but passive seems to have the edge at the end of the day. Algos... (More)

Weston NakamuraVisionary
Real Vision Exchange Manager, Programming and Community Engagement


This week: AUSTRALIA, the G5 currency leading risk assets post-COVID. Christopher Joye, Coolabah Capital Investments co-CIO aka "the hunter of Australian housing bears" interviewed by Joe Walker of the Jolly Swagman Podcast, as they cover the RBA's easing policy inflating Australia's housing bubble and narrowing credit spreads, spotting opportunities as the RBA remains on a long path of accommodation.