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Greenback Extending Gains Amid Equities Weakness

  • The slightly firmer than expected US inflation data sparked a shift higher for US treasury yields and an associated recovery for the greenback. A persistent USD bid throughout the session tilted the USD index back into minor positive territory on the week and those moves are extending in recent trade amid the weakness for global equity benchmarks.
  • Equities weakness is weighing substantially on the likes of AUD and NZD, which have extended losses to 1.5% on the session with GBP closely behind, dropping 1% and back below the 1.2200 mark.
  • EURUSD’s medium-term trend direction remains lower for now. Recent cycle lows printed last week below the 1.0500 handle confirmed a resumption of the downtrend, potentially opening a move to 1.0406, a Fibonacci retracement.

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