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.
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