All the standard proxies for risk appetite and risk aversion seem to be pointing to a steady advance in investor sentiment and the evolution of a true bull market.However, behind the bearings of speculative market benchmarks lies concerning discrepancies.

EURUSD – Euro Forecast to Remain Range-bound against Dollar
GBPUSD – British Pound Outlook Bullish
USDJPY – Japanese Yen Forecast to Bounce versus USD
USDCHF – Swiss Franc Expected to Strengthen
USDCAD – Canadian Dollar May Soon Reverse Against US Dollar
GBPJPY – British Pound Forecast Bearish versus Japanese Yen

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This past week, risk appetite found a temporary foothold and the timetable for a rate hike from the Federal Reserve was pushed back. However, despite this usually ruinous combination of events, the US dollar has not come under fervent selling pressure.

Forex option markets volatility expectations now stand at their lowest levels in nearly two years, pointing to slow currency price moves in the week ahead. We subsequently expect that the US Dollar will remain in a choppy trading range against the Japanese Yen and other key counterparts through upcoming trade.