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Quarter-end pushes USD repricing

It seems that the USD rally does not fit into the recent trend of dollar strength, and resemble the more traditional “risk-off” dynamic that investors have become accustomed too over the past year. Some will argue that the dollar price action is been driven more so by repricing of monetary policy expectations from the major central Banks “amid relatively firm performances by risky assets”. This week, the fear of a global growth slowdown, as expressed by the PMI’s, is causing some investors to unwind USD-funded long risk positions. Of all the asset classes, it seems that FX is the only one not to have been positioned for a data slowdown. For now, both equities and fixed income have managed to stand their ground. Investors should wait until the month and quarter balancing readjustment has been completed before “betting the farm.”

Below are some other highlights of the week:


Americas

 

Europe Week in FX [1]

Asia Week in FX [2]

 

WEEK AHEAD

  • A light week of data starting with German ifo Business climate
  • The USD will have another Bernanke speech to deal with
  • Consumer and Business confidence comes to us from NZD and USD
  • GBP delivers its Current a/c while CAD has GDP
  • Unemployment claims come to us from USD
  • Finally, G7 tentatively meet mid-week in Italy

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [7]

Vice-President of Market Analysis at MarketPulse [8]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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