An easing in disinflationary pressures in Europe and Japan removes some of the expected burden on the ECB and BoJ for policy action. This combined with a slight easing in risk aversion has driven a weak USD into today’s session.
Month‐end flows from passive equity managers who rebalance back to benchmark weights will likely see some selling pressure on GBP and AUD (as both the FTSE and ASX outperformed), buying pressure on JPY and neutral towards CAD, the USD and EUR—see top chart.
Read the full report: FX Daily
Scotiabank