Key points

  • USD: Biden’s withdrawal will bring dollar’s focus back on fundamentals.

  • JPY: BOJ rate hike bets and Fed’s rate cut, along with strategic intervention risks, could bring more gains.

  • GBP: UK’s political stability will be highlighted once again with US political risks escalating.

  • CAD: Another BOC rate cut could put CAD on the backfoot.

  • CNH: No sense of relief from reversal of Trump trades, as economic slowdown remains in focus.

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The US dollar managed to end the week higher as Trump Trades ensued. Safe-havens CHF and JPY were also higher while activity currencies such as NOK and NZD underperformed.

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Our FX Scorecard once again showed GBP topping the chart while NOK and NZD came in at the bottom amid downside inflation surprises.

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The CFTC positioning data for the week of 16 July saw speculators cut the long positioning in US dollar by 33%. Longs were added to GBP, EUR and AUD, while shorts were covered in JPY. NZD long positioning was cut, and shorts were added in CAD and CHF.

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Read the original analysis: Weekly FX chartbook: Election volatility and tech earnings take centre stage

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