Dollar demonstrated a distinct lack of decisiveness in its trading last week, encapsulating a theme of uncertainty that has become characteristic since the start of the year. The greenback has indeed close the week within prior week's range against most major counterparts, with Canadian Dollar being the only exception. This pattern of indecision is largely rooted in the lack of clarity over Fed's rate path, even though monetary easing is widely expected this year. The stronger-than-expected inflation data has not deterred market participants from bettering on a rate cut in March. However, this viewpoint is not uniformly held, as economists present a divided front. The overall development also led to cautious and subdued risk sentiment across financial markets. This ongoing ambiguity could continue to maintain a low volatility environment for Dollar in the near term. Meanwhile, Japanese Yen experienced varied fortunes, initially facing downward pressure due to receding speculation of an imminent rate hike by BoJ. The week was riddled with mixed messages from various media sources regarding BoJ's stance, contributing to market confusion and volatility. Despite this, Yen managed to mount a recovery towards the week's end, benefiting from decline in global benchmark treasury yields. The broader currency markets saw British Pound emerged as the standout performer, receiving a mild boost from GDP data that surpassed expectations. Euro followed closely as the second strongest, trailed by Dollar. Conversely, Australian Dollar bore the brunt of market skepticism, ending the week as the weakest link. Its performance was influenced by the downturn in Chinese stock markets and a tepid response to slightly better-than-expected Chinese economic data. Canadian Dollar and the Swiss Franc also found themselves on the weaker end of the spectrum. |