Macro backdrop of slower growth and rising inflation set to dominate FX markets

This week, markets have been fixated on rising energy prices and the impact it is having on inflation, and in turn the global growth outlook. The dollar has reigned supreme in this environment, with the DXY index rising to the top of its new range throughout the week as yields are driven higher by breakeven rates. Even the short-term increase to the debt ceiling failed to support the risk environment towards the end of the week ahead of key labour market data from Canada and the US. Next week, the relatively light data calendar focuses on output data in Europe, with euro-area industrial production and UK GDP for August pencilled in, and central bank policies in Asia. While in the US, inflation data occupies the data calendar.

Read our latest Week Ahead here:

DOWNLOAD THE FULL REPORT

Authors:

Simon Harvey, Senior FX Market Analyst

Ima Sammani, FX Market Analyst

Disclaimer

This information has been prepared by Monex Canada Inc., an execution-only service provider. The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. No opinion given in the material constitutes a recommendation by Monex Canada Inc., or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication.