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USD Support Evaporates, GBP & EMFX Outperforming

FOREX
  • A small bounce for major equity indices and lower US yields are now weighing on the USD, with potential profit taking dynamics exacerbating the price action as we approach the weekend close and US President's Day holiday on Monday.
  • GBPUSD is now over a big figure off the overnight 1.1915 lows with similar price action being seen in the Japanese Yen, with USDJPY narrowing the gap with the overnight lows of 133.94 in recent trade.
  • The emerging market basket is also performing very well with notable gains in high beta plays such as the BRL and ZAR.
  • Also worth noting that USDMXN has just traded at near-five year lows below 18.40, extending some weakness below the significant psychological/technical support at 18.50 that was breached on Thursday, potentially signalling a move down to the 2018 lows around 17.94.

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