Valuing Reddit, take 2
"We put all these [theories] to Karl Schamotta, currency strategist at Corpay, who had yet another explanation. He thinks yen movements largely reflect what’s happening to the dollar. World-beating US growth, somewhat stubborn inflation and central bankers emphasising patience have meant rate-cut expectations are being curtailed. The US two-year yield has risen 37 basis points in the past two months, and more are talking about the possibility of zero Fed cuts this year. The result is that we are on the US dominance side of the “dollar smile” — the pattern whereby the dollar appreciates when US growth outpaces everywhere else. One way to see this is that other currencies have weakened against the dollar in a similar way as the yen. The US dollar index is up 3 per cent this year. Recent renminbi weakness has looked much like the yen’s, and has also invited speculation about official intervention. Markets, says Schamotta, see a strong US economy begetting a strong dollar as a lasting feature, and are betting on it".