Weekly FX Chartbook: Relative Fed and ECB policy messaging to matter more than absolute stances Weekly FX Chartbook: Relative Fed and ECB policy messaging to matter more than absolute stances Weekly FX Chartbook: Relative Fed and ECB policy messaging to matter more than absolute stances

Weekly FX Chartbook: Relative Fed and ECB policy messaging to matter more than absolute stances

Forex 5 minutes to read
Charu Chanana 400x400
Charu Chanana

Head of FX Strategy

Summary:  Heavy central bank week ahead with Fed, ECB, Bank of England and SNB scheduled to announce policy decisions. A hold is baked in for all, and commentaries, relative rather than absolute, will matter more for FX markets. USD could gain if soft-landing hopes are retained, and ECB is relatively more dovish. Yen also in focus as BOJ pivot bets could continue.


11_FX_Weekly
Yen outperformed last week on BOJ pivot bets, despite weekly gains in the US dollar after three consecutive weeks of decline. Gold performed poorly despite starting the week with a new record high amid the pushback to rate cut expectations, particularly after Friday's goldilocks NFP.
11_FX_Momentum
Largest negative momentum seen in EUR could be tested at the ECB meeting this week. Shift in momentum is the largest in precious metals and NZD with USD turning positive.
11_FX_Positioning
Forex COT to the week of Dec 5 indicates a turn in USD positioning to a net short from long for the first time since Sept 2023, largely driven by a shift in GBP positioning to a net long. EUR and AUD longs were added further, while JPY short was cut.
11_FX_G10

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