Via Reuters, Ray Attrill, head of FX strategy at National Australia Bank:

  • "The conundrum everyone is grappling with is either the dollar is a screaming buy relative to yields, or there is a lot of dollar supportive news priced in,"
  • He said theories for the anomaly included investors reacting early to the fact the dollar has historically peaked around the time the Fed has raised rates, or they were trading in anticipation of a surge in global economic growth. But he said he was not convinced by either argument.

Posting these comments as 'conundrum' sounds spot on. Earlier I posted on the reopening of UST trading and the jump in yields:

US 10 year Treasury yield hits a two year high

That post also included this chart, the USD/JPY response!

usdyen chart  18 January 2022

Yikes ...