Weekly FX Chartbook: Fed’s hawkishness meets BOJ’s dovishness Weekly FX Chartbook: Fed’s hawkishness meets BOJ’s dovishness Weekly FX Chartbook: Fed’s hawkishness meets BOJ’s dovishness

Weekly FX Chartbook: Fed’s hawkishness meets BOJ’s dovishness

Forex 5 minutes to read
Charu Chanana

Head of FX Strategy

Summary:

  • USD: Fed has a high bar to surprise hawkish, dollar to stay sideways
  • JPY: 160+ zone in USDJPY could be tested if no intervention
  • AUD: RBA rate hike risks and upbeat global risk sentiment to support
  • CHF: CPI miss could increase odds of June rate cut
  • CNH: Devaluation risks on watch
The Fed-BOJ divergence has taken a heavy toll on JPY again last week, while Gold and Silver correction ensued.
Our FX Scorecard shows momentum increasingly negative in yen while AUD remains upbeat as RBA rate hike is back on the table after Q1 inflation beat.
Forex COT to the week of April 23 saw dollar long positioning extending by a further 27%. EUR positioning turned to a net short for the first time since September 2020, JPY short positioning extended to an 18-month high while GBP shorts were the highest since September 2022. Shorts were only covered in AUD and CAD.

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