Last week the US Dollar continued its meteoric rise as it continued to push higher dragging risk assets with it.
The main highlight of the week was the Euro as it lost significant ground. The fall further put pressure on the ECB to ease monetary policy. The sell off was triggered post poor PMI data which gave readings of contractions in both the services and manufacturing sectors. The manufacturing recession is now deepening and with the services sector joining the contraction the Euro lost the most of all on the week.
GBP was not far behind but with a more complex backdrop. PMIs showed a contraction in the private sector, but inflation figures surprised to the upside. This gives the BoE a far more complex puzzle alongside the recent Labor Government budget to contend with when assessing how best to navigate any monetary easing.
Both AUD and NZD ended the week neutral on the week with any dollar strength being outweighed or negated by the rise of risk assets.
Oil bounced hard from last week’s lows. The weekly volatility remains high albeit still within this large channel.
The week ahead we will be watching the US Dollar. The move has been long and swift and could now be viewed as over extended and may rebound if over stretched.
Data wise sees the RBNZ which could cut rates along with US GDP and inflation measure the Core PCE.
Weekly Majors’ Market Performance
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