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Dollar Giving Back Small Part of Week's Rally

FOREX
  • The dollar is giving back a small part of the Tuesday rally ahead of Wednesday's NY open, with EUR/USD recovering to test the 1.1350 level. Similarly, GBP/USD is back comfortably above 1.36 as price action mimics that seen in stock markets. The e-mini S&P has stabilised, having bottomed out at the 4535.50 low in Asia hours, to sit in minor positive territory at the crossover.
  • Outperformers so far Wednesday are commodity- and growth-tied currencies, with NOK bouncing ahead of tomorrow's Norges Bank decision (no change to rates expected) and CAD on the front foot ahead of today's CPI read. USD/CAD sits below the 200-dma, with bears eyeing the 2022 low of 1.2454 for direction.
  • The Fed remain in their media blackout period, keeping the speaker schedule relatively light and keeping focus on US housing starts/building permits data as well as Canadian CPI. Bailey and Cunliffe of the Bank of England testify on financial stability, while ECB's Holzmann also makes an appearance.

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