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Forex pairs in this Article » AUD/USD, GBP/USD (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale feels that the credit is now trying to de-couple from the QE-inspired SPX rally.

He notes that there is something rumbling in 'dollar-land' however, that continues to tell of currencies being as strong as they can get, of asset inflation slowing and of a very slow shift in sentiment towards US monetary policy. He comments that despite a favourable risk environment that has seen the SPX hit a new high yesterday, the credit market has run out of puff and CDS indices are diverging from equities.

Juckes sees that this has coincided with a slightly stronger US dollar against the Mexican peso and a rather bigger appreciation relative to AUD and CAD. He writes, "AUD looks the one of these currencies is most over-stretched and is also the one whose technical picture is worst, but I am struck that there is a pattern. If better US data (we get retail sales tomorrow) has any impact on market thinking about Fed policy, at the very least we may see further dollar strength in dollar-land, including a further fall in AUDUSD and GBPUSD."
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