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FX: the week ahead

A round-up of the prospects for the major currencies this week.

USD: The greenback lost some ground against the troubled euro despite Friday’s risk-off sentiment. All eyes will be on Wednesday’s FOMC meeting for further clues on the performance of the world’s reserve currency.

GBP: Sterling lost some ground against the US dollar in the past week. Considering the double-dip recession of the UK economy all eyes will be on Thursday’s release of the UK Q3 GDP, with traders pricing in additional BoE easing.

EUR: The markets continue to factor higher expectations for a Spanish bailout with the fall of the Spanish yields strengthening the single currency further. Should, however, Spain’s borrowing costs go higher, we could see the euro break below 1.28.

JPY: The Japanese yen reversed its strength against the greenback after some better-than-expected US economic data. Key events that could affect the yen are Wednesday’s FOMC decision and Friday’s US GDP figures.

AUD: Despite expectations for inflation to rise, the Australian dollar seems to be driven by outside forces. Key developments in the US and China should provide some clarity in this market.

Dafni Serdari
Market Analyst

Published: 22 October 2012

You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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