USD: Divergence meme has underpinned the greenback - BBH

Research Team at BBH, suggests that the divergence meme has underpinned the greenback in recent sessions. 

Key Quotes                               

“Since the start of July, most of the important US economic reports have come in above expectations, suggesting the economy gained momentum.  The NY Fed GDP tracker anticipates stronger growth in Q3 than in Q2.

The implied yield of the December 2016 Fed funds futures fell to 30 bp on the immediate reaction to Brexit and now is quoted near 47.5 bp.  Recent Fed comments also suggest that several regional presidents have recovered from their disappointment with the May jobs report and the fear of Brexit contagion, and once again are sounding hawkish.  As we have learned on more than one occasion, the key is still the Fed's leadership - Yellen, Fischer, and Dudley.

The other side of the divergence is that idea that several central banks will likely ease in the coming weeks.”