Weekly FX Chartbook: Mega Week Ahead – Fed, BOJ, BoE, Australia and Eurozone CPI, big tech earnings

Key points

USD: The Fed may find it hard to meet market’s dovish expectations.
JPY: Volatility risks remain high with Fed-BOJ policy divergence in focus.
GBP: Overbought positioning could be a risk going into close-call BOE meeting.
AUD: Any hints of hot inflation can spur further RBA rate hike bets.
CNH: Economic and tariff risks continue to escalate.

Carry trading saw unwinding risks develop last week which sent Japanese yen higher, taking other funding currencies such as Swiss franc and Chinese yuan with it while high yielders Aussie and kiwi underperformed.

Our FX Scorecard saw Japanese yen and Swiss franc momentum surge higher than sterling, but turning negative again in the last two days. Momentum is NOK seems to be the gaining, followed by SEK.

The CFTC positioning data for the week of 23 July saw speculators cut the long positioning in US dollar further. Short positioning in JPY was covered significantly, as was in CHF. Longs were added to EUR and GBP, while net positioning in AUD turned to a short.

Read the original analysis: Weekly FX chartbook: Mega week ahead - Fed, BOJ, Bank of England, Australia and Eurozone CPI

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