After a month of relative calm, this week’s USD surge in the wake of clarifying Fed testimony and unchanged core inflation is significant. Coming ahead of next week’s February Nonfarm Payrolls, the move highlights that many investors are confident that they can now pre-empt the FOMC by extending their long USD exposure ahead of any perceived Fed policy changes. Importantly, this extension was not only against the troubled EUR, but across a broad range of the major currencies. If confirmed by a strong payrolls release, FX investors should therefore expect USD-funding to squeeze high yielding currencies and lift ... (full story)