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Initial USD Strength Fades With Month-End Flow Eyed

  • The greenback traded on the front foot for much of the Friday session, with markets watching for front-loaded month-end flow that was speculated to be USD positive. Initial USD gains helped spur further upside in USD/JPY, which spilled above Y110.00 for the first time since early April.
  • This price action swiftly reversed following the Friday WMR fix, with the USD drifting to press the USD Index back toward the 90.00 handle.
  • EUR/USD recouped the day's losses as markets eyed an MNI report citing sources as saying the ECB's PEPP purchases could half after the 'active' phase concludes in March. EUR/USD remains in the March-May uptrend, but Friday's initial weakness has worked against this pattern.
  • The coming week will likely get off to a slow start, with a UK and US market holiday Monday likely keeping activity muted. After that, China's PMI, prelim inflation data from Germany, the RBA rate decision and the May nonfarm payrolls release.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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