⚠️💵Dollar Tracking Volatility Higher: Cable FX Macro

• The NA session has seen a bid in USD, which is now posting gains of 0.3% on the day. The G10 is led by oil sensitive currencies, while the franc and the pound underperform as their respective central banks decided on monetary policy

• What could be a session to digest policy divergence is not being reflected in the dollar, the Cable FX Macro Dollar Index is detached from rate spreads

• Instead, Thursday's rise in the volatility benchmark is translated into a higher dollar, the <.RDDXY> holds a positive beta to volatility. When vol rises, the dollar tends to move with it, no other currency in the G10 holds this profile as of end of May (6m regression on daily close prices)