Societe Generale Research discusses the USD outlook in light of SBV failure.

 

"If SBVs woes cap Fed rate hikes, slow the US economy somewhat but not disastrously and don’t spread globally, the dollar is set to resume the downtrend that began at the end of September, and which was interrupted by strong data in February. If on the other hand SBV was a canary in the global economy’s mine, the dollar will be stronger in a few months," SocGen notes.

 

"The chart shows credit spreads and the dollar diverging yesterday. That divergence can persist, but only as long as credit spreads don’t widen too much. We’ll be watching!," SocGen adds.