 Dollar weakness was the main theme over the whole week. It started with worries over Trump's tariff threats to Mexico. Then Fed officials came out acknowledging the risks from Trump's tariff policies and signaled their openness to rate cuts should trade tensions worsen. Selling reached its peak after poor non-farm payroll report which gives a nod to monetary easing. However, the situation had an about turn, after market, when Trump declared that the tariffs on Mexico would be "indefinitely suspended" as a so-called "agreement" was made. So, the question is, are Fed officials now less worried? Or are they more worried by such high level of uncertainty? Anyway, a whole new world is possibly lying ahead for the greenback this week. Over the week, Dollar was undoubtedly the weakest one. Yen followed as the second weakest. Major treasury yields dropped, with German 10-year bund hitting new record low. But Yen chose to follow surging stocks on Fed cut speculations. Sterling was the third weakest, saying farewell to UK Prime Minister Theresa May. New Zealand Dollar was the strongest one. Canadian Dollar was initially pressured by free falling oil prices, but then rebounded on stellar job report to close as second strongest. BoC is few of those who's less likely to cut rates. Euro was the third strongest after less dovish than expected ECB announcement. Aussie was mixed only after RBA rate cut. |
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