A bout of USD strength is rolling from currency to currency; initially driving the majors of EUR, GBP and JPY lower, having now moved into the commodity currencies, particularly the higher beta ones like AUD, and shifting as well into EM currencies. A potential hawkish shift at the Fed has led to increased market risk and driven vols higher;however so far it has not been a repeat of the ‘taper tantrum” and is instead a re‐pricing of risk. Today’s data releases include retail sales and University of Michigan Confidence—both important in terms of gaging how the consumer is shaping up in Q3.
Read the full report: FX Daily