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A rising USD/CNH interprets into extra stress on JPY, AUD and NZD – SocGen


USD/CNH tracks yield differentials nearly in addition to USD/JPY. Equipment Juckes, Chief International FX Strategist at Société Générale, analyzes FX markets – which can be nonetheless watching central banks.

NOK/SEK has upside forward of subsequent week’s Norges assembly

Relative ECB and Fed fee paths recommend the euro stays weak until stronger European knowledge emerges quickly. EUR/GBP in the meantime, is monitoring fee expectations very intently, however since we’ll get two extra months’ price of CPI knowledge earlier than the Sep 21 MPC assembly, an enormous lurch in expectations is unlikely, someway.  

USD/CNH tracks 10-year yields practically in addition to USD/JPY. The Chinese language authorities might not desire a weaker forex from right here, but it surely’s laborious to see this development turning downwards till US yields peak. A rising USD/CNH interprets into extra stress on JPY, AUD and NZD. 

Lastly, NOK/SEK can also be monitoring fee expectations intently. The Norges Financial institution is more likely to elevate charges by one other 25 bps at subsequent week’s assembly and that ought to be sufficient to maintain the NOK bid.

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