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The fourth quarter was a tough one for USD bulls. The currency initially held a higher-low support bounce into October trade, but bulls were unable to re-test the highs, and that led to a very strong bearish reaction in November that has run through the first half of December.
This all happened even as the Fed continued with their 75 bp rate hikes in September and November, finally softening the hawkish touch a bit in December with a 50 bp hike.
But, as is often discussed when it comes to the USD, or more specifically DXY which is the common measuring stick of the USD, there is a skew in its composition. The DXY contract is essentially a composite of underlying currencies, of which 57.6% is the Euro and 13.6% JPY with another 11.9% in GBP. The British Pound put in a collapse-like move in…
