The financial community switched back to ‘risk on’ yesterday, following reports that US Tr. Secretary Mnuchin is in favor of rolling back tariffs imposed to Chinese goods. Among currencies, the pound continued gaining on expectations that a no-deal Brexit is likely to be avoided. As for today, Canada’s inflation data for December are due to be released. Although we see some downside risks, we doubt that they could tempt BoC officials to change their mind with regards to more hikes over time.
Risk Assets Up, Safe havens Down on Tariff-relief Hopes
The dollar traded lower against most of the other G10 currencies on Thursday. It gained only against the safe havens JPY and CHF, while it traded virtually unchanged versus CAD and SEK. The main winners were GBP, and the commodity-linked currencies AUD and NZD.
The performance in the FX sphere suggests that, at some point during the day, market sentiment switched back to ‘risk on’. Indeed, even though most major EU bourses ended their trading in the...
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