⚖️🔺Dollar Continues to Trade In Line With Rate Spreads: Cable FX Macro

• Most of the dollar rally seen this year has been tracking rate spreads, our measure of interest rate differentials, led the greenback higher into May

• In early April, front-end USD spreads reached the highest level since late 2022

• This is the same macro theme behind the USD/JPY resilience, despite verbal warnings and FX intervention, rate spreads justify a weak Japanese yen