Via currency strategy at GS, a note on the USD, the investment bank saying they are sticking with their bearish US dollar call for the medium term.

Citing:

  • robust case for improving European growth in coming quarters and stimulus from China

US rates are high compared with a trade-weighted average of G10 rates. GS say that it'll be when rate differentials fall 80-100 bp (US 2 year notes) that EUR and GBP will benefit.

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Dunno about anyone else but 80 - 100 bp falls in differentials could be some time off indeed. Depends on what you think is the 'medium term' I guess.