US dollar weakens against Swedish SEK and Norwegian NOK

Earlier in the week, I discussed about the ‘Sell America’ topic due to intensifying macro volatility. The three main asset classes to underweight are: US dollar, Treasuries and US equities.

Since that publication, it appears that the Trump administration has recoiled from using the most brutal punches (ie, military occupation of Greenland). The US president even signed the inauguration of the ‘Board of Peace’ in Davos this week, much to investors relief.

Still, the market is not entirely convinced that the Greenland issue will go away completely. Heightened geopolitical tensions are here to stay.

This is why I highlighted USD-CHF (Swiss Franc) as potential FX rate to sell. The Swiss currency is a widely-perceived “safe-haven” asset that appreciates in value during market turbulence. The exchange rate has been capped beneath 8.2 for the last six months.

Another currency that the Dollar is weakening against is the Swedish Krona.

The rate recently slumped to multi-year lows as its year-long downtrend accelerates. Whilst oversold, the Krona is heading firmly into the former lows at around 8.5.

Another Scandinavian currency that is climbing against the US dollar is the Norwegian Krone.

The rate slipped beneath the critical level at 10.0 (in favour of NOK), a breakout that may open doors for a further decline.

But, the dollar is not weakening across all FX pairs.

The Indian Rupee, for example, lost more ground against the USD. The rate slumped to record lows against the dollar, threatening to reach the band at 92-94.

One therefore has to be selective and careful when eyeing to implement the sell-dollar trade.