Volatility in FX markets this week was largely driven by markets trying to price in the hawkish shift by the FOMC last week. Notable commentary from Fed members such as Bostic, Kaplan and Bullard provided markets with a bit more of an insight into the growing calls for earlier policy normalisation, while Chair Powell also stated that near-term inflation was more aggressive than the FOMC expected. On the whole, broad dollar moves drove price action in G10 currency pairs, with the exception of the pound on Thursday, which fell due to the Bank of England signalling a more dovish reaction function than previously suggested.
Read Monex’s Week Ahead:
Authors:
Simon Harvey, Senior FX Market Analyst
Olivia Alvarez Mendez, FX Market Analyst
Ima Sammani, FX Market Analyst
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