Weekly Trading Forecast: Will FX Policy and Global Risk Come Up at G-7
The Dollar has mounted a recover and risk trends have lost traction this past week. Will these themes carry through to the week ahead, and what will the G-7 meeting elicit from speculators?
The Greenback advanced against all of its major counterparts this past week, and the USDollar secured its strongest two-week rally since the May 2015 climb forestalled a bearish reversal.
Despite general improvement in European data flow, EUR/USD continued to ease off after better than expected US economic data (and weaker Q1'16 Euro-Zone GDP data). Moving forward, the thinnest market positioning in two years leaves plenty of room for EUR/USD to fall.
Mixed data prints coming out of the U.S. & U.K. may foster range-bound prices in GBP/USD especially as the Federal Reserve and the Bank of England (BoE) retain a wait-and-see approach for monetary policy.
The onshore Yuan (CNY) extended losses against the US Dollar on Friday after PBOC fixed the daily reference rate to the weakest level in two months, to 6.5246.
The Australian Dollar may find itself torn between the influence of RBA monetary policy expectations and market-wide risk sentiment trends in the week ahead.
Gold prices are lower for a second consecutive week with the previous metal off 1.26% to trade at 1272 ahead of the New York close on Friday.
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