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Weekly FX Chartbook: JPY eying wage talk headlines and US CPI

Forex 5 minutes to read
Charu Chanana 400x400
Charu Chanana

Head of FX Strategy

Summary:  Increasing pressure on dollar as US goldilocks continues, and focus this week primarily on Japanese yen and Gold with US CPI on the radar. JPY could extend gains if BOJ pivot hopes for March 19 meeting gather hope, especially with ‘shunto’ wage negotiations set to conclude on March 13 and early results could be available this week. GBP outperformance also faces the wages test this week.


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Dollar weakness underpinned the FX markets last week after dovish hints from Powell and NFP report. Gold extended to record highs. JPY weakness reversed while GBP extended gains further after the Budget announcement did not spur any spending concerns.
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Our FX Scorecard shows momentum turning positive for Gold and JPY, while GBP and AUD also sustained. Dollar, CNH and CAD, meanwhile, in a negative momentum going into the US CPI week.
11_FX_Positioning
Forex COT to the week of 5 March indicated an almost unchanged dollar positioning but significant shifts for other currencies. GBP and EUR long extended further while JPY shorts were cut. Meanwhile, shorts were added to CAD, CHF and AUD.
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