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BofA: Crowded USD longs signal caution; convergence with rate differentials underway
Synopsis: BofA highlights a potential market saturation with USD long positions, as evidenced by the currency's understated response to positive US retail data amid a contrasting rate sell-off. The report suggests that the aggressive positioning in USD longs, reaching notable highs, might hint at an overshoot in its recent ascent, aligning with negative spot-volatility correlations for the DXY. This scenario points to a possible recalibration phase, with the 'crowded trade' effect potentially li...
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Posted: Oct 20 2023, 14:06
Author Name: forexlive
Views: 112133