A new phase for the US dollar

- "The last two months have seen the dollar decline significantly on a global basis. Declining expectations for US growth relative to global growth have been a key driver. But the market is now pricing in a fairly meaningful degree of global growth decoupling, and further dollar downside from this source may be limited in the near term. Consistent with what we have seen in the last few days, we expect more two-way volatility in key dollar crosses in the next 1-2 months. As a result, we are looking more at relative value opportunities in FX rather than outright USD exposure."

Nomura FX Insights 20100812

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