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USD Index Moderately Higher To Start The Week

EMERGING MARKETS
  • Tensions over China will be high on the agenda as top diplomats from Group of Seven nations meet over the next two days in Japan, according to a senior State Department official. Geopolitical challenges in Asia are set to come into greater focus now that Japan holds the rotating G-7 presidency, the official told reporters ahead of the foreign ministers’ meeting, which comes about a month before US President Joe Biden and other leaders will head to Hiroshima for the annual leaders summit.
  • Recent market expectations of a peak European Central Bank deposit rate of between 3.5% and 4% look about right, but inflation could remain slightly above the 2% target for some time, Belgian National Bank Governor Pierre Wunsch told MNI, adding that a U.S. hard landing could also influence eurozone monetary policy.
  • Currency markets are off to a relatively sedate start to the week, with most pairs and crosses respecting the recent ranges amid light newsflow and market signal. The greenback is very modestly higher, with the USD Index narrowing in on 101.99, the 23.6% retracement of the mid-March - April downleg.

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