FED REINTRODUCES VOLATILITY AS POLICY TIGHTENS
• USD retraces some of its recent strength as risk aversion rests.
• The Fed re‐introduces vol & suggests asset bubbles are a policy driver.
• CAD rallies—markets prices in 40% chance of higher rates within 1‐year.
• EUR is flat as market struggles with indecision; risk reversals warn of EUR downside but the currency remains glued to GE-US spreads.
• GBP is higher on broad markets; King delivers last comments as Gov.
• JPY is higher but news flow is limited.
• AUD rallies; but technically weak unless spot can break above 0.9295.
• CNY rises but funding pressures remain as PBoC does little.
Read the full report: FX Daily
Scotiabank