 Dollar, which has dominated currency markets in recent weeks, finally eased back last week. But this retreat does not necessarily indicate a reversal of its upward momentum. Instead, the greenback appears to be taking a breather ahead of the impending US presidential election. Closing as the second strongest performer among major currencies, Dollar still has potential for further gains, if Treasury yields extends their rally and if post-election developments stir risk aversion. Euro edged out the greenback to become the strongest currency last week, buoyed by robust economic data from the Eurozone that killed the case for aggressive monetary easing by ECB. However, Euro's late-week softness against both Dollar and Sterling, raises questions about the sustainability of its rally. New Zealand Dollar also performed well, ending the week as the third strongest currency. At the weaker end, Australian Dollar struggled at the bottom as disinflation progress finally cracked open the door for RBA rate cuts next year. Japanese Yen was the second weakest, continuing its divergence from Japanese stock markets. Canadian dollar ranked third among the weakest currencies. Sterling endured a volatile week, swinging between losses and gains, and ultimately settled in the middle. Meanwhile, Swiss Franc managed to hold its ground in the middle too, despite sell off on weaker inflation data, with some market support likely stemming from its status as a safe-haven currency amid ongoing global tensions. |
