NEWS / Foreign Exchange

Is the USD sell-off overdone?

Since the beginning of the year, our Index of Weekly Economic Indicators has been showing an accelerating level of economic activity in the US economy. This has been very much at odds with the monthly releases like the Richmond Fed Manufacturing Index, US Home Prices, Existing Home Sales and the Fed??™s Beige Book.

Thus, Friday??™s US GDP should be very interesting not least because we think consensus is too low. Judging from our indicators, we believe a reading above the 2 percent threshold is possible and thus USD shorts will be squeezed.