USD, EUR, JPY, AUD, NOK flows: JPY and AUD look good value
A mild risk reocvery is being seen, but whether it continues will depend on the news on tariffs. But there is value in JPY, AUD and NOK
As yields and equities edge back up, the USD is edging lower against the riskier currencies. While the JPY and the CHF have performed well today, this is more a catch-up on the declines in equities and yields in the previous days than a reaction to today’s moves. The JPY in particular still looks good value on the crosses relative to equity risk premia, but a recovery in risk favours the riskier currencies against the USD.
Whether this is sustained will depend on whether there is any delay in the imposition of tariffs, which is expected to be announced tomorrow. But we still consider the AUD as representing good value on the crosses at these levels, particularly against the EUR and CAD, while EUR/NOK remains uncomfortable above 12.
