The one ‘smile’ that will survive the current FX torpor, is the scenario analysis that suggests the USD will do best at the extremes for risk, either when risk appetite is very positive or negative. At the same time the middle ground between risk positive and negative (terrain we arguably occupy currently) where the USD underperforms, will continue to shrink. The 2014 vintage of the ‘’smile’ does however come with some unique features, not least in the way positive and negative risk scenarios impinge on each other.
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