Dollar bulls experienced a somewhat disheartening week, as the initial rally supported by hawkish remarks from Fed Chair was halted by subsequent inflation data release. Consequently, the greenback managed to secure only the third position for the week, trailing behind Swiss Franc and Euro. The vigorous late-week rally in US stocks, coupled with the sluggishness of benchmark yield, indicates that the markets remain unconvinced by FOMC's projection of two or more rate hikes this year. However, with the tightening cycle at its current phase, all outcomes are highly data-dependent, and the week ahead is packed with significant data releases that traders will need to navigate. Back to the currency markets, Canadian Dollar emerged as the worst performer of the past week, though this appears to be more a result of a slowing down and consolidation of its strong gains from June, rather than a bearish signal. Yen, as the second-worst performer, confirms its ongoing weakness with little doubt. Risk-sensitive currencies the Aussie, Kiwi, and Sterling delivered mixed results, reflecting the prevailing uncertainties in the global financial markets. |
