Societe Generale FX Strategy Research notes that as US Political concerns weigh on investor sentiment, the JPY re-emerges the FX winner.
In that regard, SocGen notes that USD/JPY still faithfully tracking Treasuries, and getting ready to test the hypothesis that in the current climate, any sell-off for risk assets is a short-term affair that will be followed by investors returning in the search for yield.
“The question is whether these are US political rain showers like the ones drenching London’s commuters, or real storms with lasting damage. Only time will tell but while the appetite to come back and hunt for yield does start to decrease after a while, we still tend to think this sell-off will be short-lived,” SocGen argues.
USD/JPY is trading circa 112.04 as of writing.
Source: Societe Generale Cross Asset Research
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