• Risk trends leveled off this past session, opening pairs like GBPUSD to rate speculation
• A global easing in growth and price pressures has spilled into the UK and tripped up the Pound
• Pairs like EURUSD and the Yen crosses await clear and definitive risk cues to spark
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The swell in fear eased this past session, allowing the FX market's other primary driver to leverage volatility for pairs like GBPUSD. With growth and inflation forecasts dropping globally, we have seen monetary policy bearings for the likes of the Eurozone and US ease...albeit at different rates. Perhaps last to the downshift is the British Pound, which means it has the most to lose. The September UK CPI figures dropped to its slowest clip in five years, leading Sterling traders to question their positioning for near-term BoE hikes. There is plenty more market impact to squeeze out of monetary policy bearings, but the broadest trends most violent bouts of volatility will arise from risk trends. And at the top of the list for exposure may be EURUSD and that decade-long 1.2000 floor. We discuss this and more in today's Trading Video.
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