Weekly FX Chartbook: Heavy central bank focus as FOMC, BOJ, BOE, SNB, RBA meet

Forex 5 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  Bank of Japan’s pivot away from negative rates is becoming a baseline view ahead of Tuesday’s announcement, but gains in the Japanese yen could remain limited by dovish commentary and risks of a hawkish surprise by the Fed the next day. Two-way risks for the dollar this week as markets anticipate a hawkish shift in dot plot, but CHF sees downside risks as SNB can surprise with a rate cut or stronger FX language. GBP also has a lot at stake this week with BOE meeting vote split and Nvidia-driven equity momentum in focus.


USD strength was back to the fore last week after hot CPI and PPI prints reaffirmed the yield advantage. Activity currencies like NOK, SEK and NZD had the most to lose, while JPY also remained on the backfoot despite strong wage growth signals.
Our FX Scorecard shows strong momentum in metals, although USD strength is taking away some of their shine particularly for Gold.
Forex COT to the week of March 12 indicated non-commercial flows were mixed and the aggregate dollar long was cut by over 60%. Speculators bought JPY, EUR and GBP while selling CAD, AUD and NZD. Worth noting that sterling long positioning is the highest since 2007.

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Other recent Macro/FX articles:

18 Mar: Global Market Quick Take - Asia
14 Mar: FOMC vs. BOJ: Who moves the Yen?
12 Mar: Dampening equity sentiment could test GBP resilience
11 Mar: US inflation report: How to trade the event
11 Mar: Macro & FX Podcast: Have soft landing hopes turned into expectations?
11 Mar: Weekly FX Chartbook: JPY eying wage talk headlines and US CPI

6 Mar: Bitcoin fever is running high, again
5 Mar: FX & Macro Podcast: US jobs data, China's "Two Sessions" & Super Tuesday
4 Mar: Weekly FX Chartbook: NFP miss may not be enough to turn the dollar around
28 Feb: Navigating Japanese equities: Strategies for hedging JPY exposure
26 Feb: Weekly FX Chartbook: Focus will shift back to inflation and rates trajectory
23 Feb: Nvidia momentum spills over to FX markets
21 Feb: Central bank divergence on the radar: Hawkish RBNZ, Dovish BOC and SNB
19 Feb: Macro & FX Podcast: How the debate about the US economy has shifted
19 Feb: Weekly FX Chartbook: Dollar rally looking stretched, bullish signals for NZD
15 Feb: Swiss Franc’s bearish view gets more legs
14 Feb: Sticky US inflation could make dollar strength more durable
13 Feb: Weekly FX Chartbook: US and UK disinflation story in focus, watch for ECB split widening
9 Feb: Japanese Yen is throwing a warning
8 Feb: FX 101: USD Smile and portfolio impacts from King Dollar
5 Feb: Weekly FX Chartbook: More and more reasons to stay long US dollar
1 Feb: FOMC out, BOE and NFP next – will the hawkish waves continue?

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