USD: reversed order

After being well in the lead throughout the whole of Q322, the USD has for now
had a tougher start to Q422. The USD indeed underperformed all its G10 FX peers
bar the CHF yesterday, with the largest losses being recorded against the highbeta
bloc. A broad risk-on tone surely helped such a USD reversal, as well as the
sharp correction in UST yields on the day. From a fundamental standpoint, not
much has changed from one quarter to another, while fresh money could have also
been put in to play. The release of a downbeat US ISM manufacturing survey was
not sufficiently dramatic to be blamed for a major alteration in US economic
prospects, as they continue to compare favourably to most other developed
economies. Nevertheless, it has to be noted that the new order sub-component
slipped further into contraction territory to its lowest level since 20 May, even
though the US factory orders hard data is yet to show signs of a significant
deterioration, perhaps because it only looks at value and not volumes. In any case,
today’s release for August is unlikely to move the markets much, as last week’s
advanced figures for durable goods hinted at resilient order books, and more
influential US indicators loom just ahead with the US jobs report for September on

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