2016 performance of USD to forex majors in 4 sentences
- GBP was the biggest loser driven by ‘Brexit‘ dynamics.
- JPY was a big turnaround story – the biggest winner in H1, losing it all by H2 2016.
- All other pairs are clustered tightly demonstrating high level of positive correlation; without specific drivers, they were switching together between ‘risk-on’ and ‘risk-off’.
- From a loser in the beginning of the year (ex GBP), the USD clawed back losses against major currencies to nearly unchanged; outcome of US Presidential Election was a turning point.
But to sum it up, 2016 was all about ‘Brexit, POTUS, GBP and the Japanese Yen’