The dollar continues to push back against competitors in global markets, going on the offensive against a broader front of currencies and stock indices. Geopolitics is ceding to monetary policy its role as the primary driver. And that could be bad news for risksensitive assets, as there is still no light at the end of this tunnel.

The dollars main competitors, the euro and the yen, seem to have exhausted their downside potential, and now the volatility threatens the next, broader range of currencies.

The yen has stabilised at 20year lows at 128 after a 12 slump since the start of March and a 25 drawdown since the 2021 start.

EURUSD was one step away from 1.0700 at the start of the European session, having lost 4.4 since March and 13 from its peak in January 2021. The movement is not too sweeping but steadily lowers the euro traded back in 2003.

However, we are now seeing a marked reduction in the yen and the euro amplitude, while in contrast, it is rising in other market sectors.

The British pound is flying into the abyss for a second day, losing 0.77 on Monday after falling 1.6 on Friday. GBPUSD has capitulated, pulling back to 1.2740, where it last was in September 2020. GBPUSD has moved into the lower half of the trading range this week from after the pandemic hit. The tactical target for the bears, in this case, could be the 1.2600 area, with the final point being 1.2000, where the GBPUSD has repeatedly found support over the past six years.

The Australian…