USD Remains Weak, Falls after GDP Release, A Volatile week incoming?
On Friday, the greenback's losses were broader, unwinding gains of Thursday, but were not as terrible. Overly, the capital market has adopted a cautionary stance, even though currencies held fairly well compared to the volatility in the stock market. Specifically, there were limited losses in the Euro and GBP pairs. Simultaneously, the JPY rose to its strongest level in two months as traders unwinding their positions on the greenback offered support for the Yen.
This week, the focus will be on the USD. Indeed, the greenback remains in range with fleeting gains that are quickly reversed. However, with several manufacturing data and NFP set for release on Friday, traders are closely monitoring how this will affect the currencies market and specifically the effect on the USD. A positive NFP release and confidence in the labor market would trigger USDX advances towards $91.
Impact on the USD:
Neutral. The USDX may likely remain in range though volatility could spike from Wednesday ahead of Friday. The Euro, CAD, NZD, and AUD are relatively steady due to improving conditions in their respective economies. However, a retracement from spot levels could be on the offing if gains in the USD are extended.
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