US Dollar

The US Dollar sits in the middle of the pack at #4, scoring +2 — neither clearly strong nor weak. Interest rates are the main headwind. At around 3.6%, the US Dollar pays far less than higher-yielding peers like the dollar or pound, which makes it less attractive to carry-seeking capital. Positioning is supportive: relative to the other majors, large speculators are leaning in favour of the US Dollar rather than against it. Markets are relatively calm and risk appetite is healthy, which takes some shine off the US Dollar. As a safe-haven currency, it draws less demand when investors are confident enough to chase yield elsewhere. The underlying economy is a bright spot — tight labour markets and solid employment data give the US Dollar an extra edge over currencies where the jobs picture is deteriorating.