Impact of Bond Market Rout on FX Looks Modest for Now
Dow Jones
Sep 15
0819 GMT - Spillovers from rising global government bond yields into the foreign exchange market have been modest so far, MUFG Bank's Lee Hardman says in a note. This is highlighted by low measures of volatility in the forex market, he says. However, the Australian dollar, New Zealand dollar, Swedish krona and emerging markets currencies have underperformed. "Downside risks for those currencies would intensify if rising bond yields and energy prices triggered a deeper correction lower for risk assets heading into year end," he says.
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