Intermediate-term currency drivers: growth & yield!

“I have bought golden opinions from all sorts of people.”  

- William Shakespeare  

1. Growth: US (orange line) vs. Eurozone (purple line):  US at 57.3 and rising; Eurozone at 48.7 and falling ...        032312 global pmi                  

2. Yield: US versus Eurozone 10-year benchmark yield spread now favors the US by 35 basis points and is rising. 

032312 10y notes

If growth and yield, in their typical feedback loop, are still considered key drivers of currencies over the intermediate-term (and I think they are), it suggests the dollar should be well supported relative to the euro in the months ahead. 

Happy Friday!    

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