Weekly Trading Forecast: What Currencies Face Volatility Amid Low Volatility Global Markets
Activity in equities and other asset classes have ground to a halt recently. The FX market is not immune, but it has maintained a volatility advantage over its brethren. Which currencies and events can are set to stir in the week ahead?
Conditions are extraordinarily quiet across the financial market, and the Dollar is certainly not escaping the lethargy.
The Japanese Yen has been quite the volatile currency of recent. After the Brexit referendum drove the Yen to fresh highs as risk aversion permeated through global markets, a two-week bout of weakness in the currency threatened to pose a longer-term reversal on the prospect of an even more enhanced stimulus package coming out of the Bank of Japan.
The Australian Dollar may decline amid rebuilding near-term RBA rate cut speculation following minutes from Augusts’ policy meeting and July’s employment data.
The recent string of lower highs & lows in USD/CAD accompanied by the mixed data prints coming out of the U.S. raises the risk for a further decline in the exchange rate especially as economic developments coming out of Canada are anticipated to show sticky price growth paired with a pickup in private-sector consumption.
The New Zealand Dollar is the little (regarding relative G10 GDP) currency that could. Despite the 25bp rate cut by the RBNZ on Thursday morning, the New Zealand Dollar continues to be pushing higher.
This Thursday marks the one-year anniversary of the PBOC de-pegging the Yuan from the US Dollar.
Gold prices ended the week fractionally higher with the precious metal advancing just 0.1% to trade at 1337 ahead of the New York close on Friday.
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