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SUMMARY: USD Weakness Prevails Despite Commodities Turnaround

FOREX
  • A softer greenback had largely been attributed to further commodity strength and positive risk sentiment early on Tuesday, particularly benefitting the antipodeans, rallying close to 1%.
  • A notable reversal in the commodity complex, led by a sharp move lower in oil prices, halted the momentum of dollar depreciation.
  • However, tight ranges during the US session in G10 FX has meant the Dollar Index (DXY) is set to close at its lowest level since early January this year, down 0.42% on the day.
  • As expected with its large weighting in the index, EUR joins Aussie and Kiwi as the largest beneficiaries with EURUSD (+0.63%) pressing on towards the February highs of 1.2243.
  • In a continuation of recent technical breakouts, GBPUSD breached 1.42 and is within touching distance of the year's high at 1.4237. USDCAD also reached the lowest level since May 2015. Fresh lows of 1.2013 were posted before the oil move brought the pair back to ~1.2050.
  • UK and Canadian inflation data headline Wednesday's docket before markets turn their attention to the FOMC minutes later in the session.

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