Yen was once again the runaway loser last week as global benchmark treasury yields, except JGB, surged. BoJ has clearly put a cap in 10-year JGB yield and the result is widening spread and persistent Yen selloff. Euro showing some renewed weakness but it's so far still range bound against Dollar. Nevertheless, extended decline in Euro against Swiss Franc could finally prompt a breakout in EUR/USD. Commodity currencies are the clear winners, with Aussie leading the way. While RBA is still in wait-and-see mode, traders are probably starting to price in more aggressive tightening should the cycle start late. Also, as a major export of agricultural product and raw materials, the Aussie would continue to be benefited from surging commodity prices. |
