Research Team at Deutsche Bank, notes that the trendiness in G10 FX has fallen to modest levels over the past fortnight. Key Quotes “At the same time, smoothness increased marginally, while uniformity has plunged to near quarterly lows. Sovereign risk has been one of the main drivers in G10 FX, explaining the underperformance of GBP with the large CDS spread. Alongside this, the latest policy decisions from ECB, BoC and RBNZ meant monetary policy is another key driver in G10 space. As for macro drivers, valuation is currently displaying a strong positive correlation with FX. Meanwhile, current account surpluses have helped the Scandies to outperform. EM: In emerging markets, trendiness has risen after hovering at very low levels over the past month. Meanwhile, uniformity has further declined at a modest pace, while smoothness has increased. The high-yielders BRL, IDR, MYR and CLP have outperformed despite the recent credit widening. Interestingly, monetary policy has been negatively correlated to the price action over the past fortnight. Positive growth momentum has lifted a number of EM currencies such as IDR and CZK.” For more information, read our latest forex news.