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USD Index Close To Unchanged On Week Amid Mixed US Inflation Figures

  • Despite March Fed cut pricing building back up to a cumulative 21.5bps, broad volatility for the greenback this week remained relatively low, with the USD index’s weekly range unable to breach last Friday’s extremes. Mixed inflation data in the US prompted two-way flows for the DXY, but culminated in the index remaining close to unchanged levels from a week prior.
  • USDJPY continues to register the most impressive daily ranges, with another 12- pip swing on Friday. Initial gains to 145.50 evaporated in the aftermath of the data and stale post-CPI longs were further challenged throughout the final session of the week. Despite trading as low as 144.37 the pair has stabilised around 144.80 as we approach the close.
  • A key short-term support has been defined at 143.42, the Jan 9 low. A break of this level is required to instead signal a top and highlight a resumption of bearish activity.
  • GBP/USD briefly made a round-trip back to the week’s best levels as the greenback initially extended upon the post-PPI pullback. Sustained cable gains through 1.2785 would open YTD highs and the bull trigger of 1.2827. Above here, the pair clears the best levels since August of last year.
  • Stable equity markets continue to provide a relatively solid backdrop for emerging market fx, with Latin American currencies performing well on Friday. USDMXN hovers close to year-to-date lows at 16.80 and will eye a move towards support at 16.6262, the Jul 28 low.
  • Swedish CPI and Eurozone IP & trade balance data highlight the docket on Monday. US banks will be closed in observance of Martin Luther King Jr. Day.

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