Bet on the USD in 2010

The majority of the USD strength seen in the initial half of the year. Here is a closer look at all major currencies against the USD. The Greenback near cyclical lows and in the process of carving out a major base. Fundamentally, it is all about yield differentials and interest rate expectations. The onset of a global recovery is starting to put the Fed Goverment in a position to at least consider the possibility of an exit strategy and reversal of their super accommodative monetary policy measures. be sure to concede that this will also result in a continued reversal in other central bank monetary policies, which have already seen through the likes of Australia and Norway. the rate at which the Fed will be required to tighten going forward will be than much more extreme and aggressive given where US interest currently stand. This will force a significant narrowing in yield differentials back in favor of the USD. This should result in some major position adjusting and shift back into the USD.