Financial markets were dominated by themes of cooling inflation, a slowing economy, and increasing expectations of policy easing by both ECB and Fed last week. This convergence of factors ignited a full risk-on mode among investors, propelling major US stock indexes and Germany's DAX to sharp gains. In tandem, benchmark treasury yields in both Europe and US experienced significant declines. Consequently, Euro and Dollar emerged as the week's worst performers, largely overwhelmed by these market movements. Looking ahead, this risk-on sentiment is expected to persist, likely keeping Dollar under pressure generally, with the notable exception of its pairing with Euro. Technical developments in various Euro crosses suggest that the selling pressure on the Euro would persist for some time. Conversely, New Zealand Dollar stood out as the strongest currency, largely due to the RBNZ's unexpectedly hawkish stance on interest rates. RBNZ's new economic projections hinted at the possibility of further rate hike next year. Additionally, Deputy Governor Christian Hawkesby highlighted the unforeseen impact of record net migration on boosting demand and inflating prices. Other currencies displayed mixed performance. Yen ranked as the second strongest, buoyed by expectations of BoJ's exit from negative interest rates next year. However, Yen's gains were primarily against Dollar and Euro, failing to break through prior week's highs against others. Swiss Franc ranked third in strength, largely driven by buying against Euro. On the other hand, Sterling was was comparatively weaker, and Canadian Dollar showed mixed performance despite strong job data. Australian Dollar also lacked clear direction, a lower-than-expected monthly CPI reading lessened the need of further interest rate hikes by RBA next year. | 