Risk On Can Be Supportive For Aussie
Inflation in the US came down last week which allowed stocks finally to rally while US yields and USD came down across the board. Speculators think that FED will slow down the hikes, but further move on some of the FX pairs will now depend on data outside of the US. We have UK and Canadian CPI this week, while the focus will be also on RBA meeting minutes. So these events can shake the FX markets a bit, but based on sentiment reading it looks like risk-on is here, at least for the next few days after a positive close on Friday on the US stock market. We see DAX trading at the highs so eur may also continue higher as recovery on DAX should resume after set-back.
However, our focus for potential trade ideas can be on AUD or NZD as these two were quite strong since Thursday’s US CPI data. JPY is also strong but move over extended, so there can be some pullbacks.
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