USD steadies but set to remain under pressure

We’ve seen some decent sized moves today in USD/AXY with USD/KRW down at 16-month lows and the big buck generally slipping across the board with the obvious exception of the Yen. Amongst the significant moves in the majors, cable broke above 1.6300 and AUD looks to have confirmed a short-term base at 1.0350.

I’ve read an analyst piece from UBS which opines that the USD is set for some decent gains now that the latest funding deadline has been passed but most of the chatter I’m hearing from the hedge fund world seems to be of the opposite tack. The big punters seem more of the view that Asian equities will have a really good year and that being short the USD is a safer play.

Short-term I’m certainly of the view that the USD will struggle but whether this period lasts for a day, a week, or a month, I’m not really sure yet. Hopefully we at least get some badly needed volatility.

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