Dollar was sold off broadly last week as a 25bps rate hike by Fed in February is now pretty much a done deal, after CPI data. On the other hand, Yen staged a strong rally on speculations that BoJ is now much closer to exit of ultra-loose monetary policy. USD/JPY ended as the biggest mover and more downside is likely ahead. But as argued below, from a medium term long term point of view, a bottom would be formed ahead awhile 120 handle is looking a bit stretched. In between Dollar and Yen, Swiss Franc was the second worst performer, with upside breakout in EUR/CHF. Canadian Dollar was the third worst. On the other hand, Euro and Sterling were the next strongest one, with help from buying against the Swiss Franc, while Aussie was also strong. |
