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ld reduce the appreciation pressure. Moreover, a band-widening should, if anything, lead to CNY weakne

12 Source: Deutsche Bank, Bloomberg Finance LP Nov 12 Feb 13 May 13 NZD/CAD Model - uses Dairy Futures, NatGas, Crude, CRB, rate differential, USD TWI, VIX Deutsche Bank AG/London Page 9 EFTA01464441 16 May 2813 FX Blueprint: Dashing Buck While both crosses have now fallen a long way relativ

Source: DB FX Research EUR/USD PPP EUR/USD 20% Band 0.6 0.8 1.0 1.2 1.4 1.6 73 77 81 85 89 93

EFTA01464491 1.5% 2.0% Figure 6: Record Negative Correlation Between Dollar and Stocks Reversing Suggests Regime Change 2y correlation between USD TWI and S&P500 using ly rolling returns using levels Deutsche Bank AG/London Page 7 EFTA01464492 28 February 2013 Exchange Rate Perspectives .Fig

he Bank Research Index USDTWI PPP Implied 20% Band 100 110 120 130 60 70 80 90 Figure 7: Do

rg Finance LP, Deutsche Bank Research Index USDTWI PPP Implied 20% Band 100 110 120 130 60 70 80 90 Figure 7: Dollar leads productivity USD TWI (dev from PPP implied, 12q lead, lhs) US Nonfarm Productivity (dev from trend) (rhs) 10 20 30 40 -30 -20 -10 0 10 Correl (since 1982): 51%

120 130 60 70 80 90 USDTWI PPP USDTWI 20% Band 60 70 80 90 100 110 120 130 Figure 3: EU

r has fallen substantially Source: DB FX Research and US Treasury Source: DB FX Research and US Treasury Figure 11: No clear relationship between USD TWI and UST purchases Figure 12: Net equity flows turn positive Source: DB FX Research and US Treasury Source: DB FX Research and US Treasury Page 2