📝YTD FX Returns Correlated to U.S. Equity Holdings: J.P. Morgan FX Strategy

The world is still long US equities (or assets) and related FX rebalancing should continue to weigh on the dollar vs. the largest holders. This list features Norway, Switzerland, Canada, Sweden, UK, Australia, EMU and Japan in G10, as well as Singapore, Israel, Korea and Taiwan in EM. The dynamic extends beyond just securities holdings and also encompasses USD holdings by other entities like exports and lifers in Asia. The bottom-line is that the overhang of USD longs is still set to be a source of weakness for the currency with Europe and Asia at the forefront. YTD FX changes have been correlated with the aggregate holdings of US equities. - J.P. Morgan FX Strategy