FX Brief: Yen Strengthens

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  • As US investors enter the fray, there is a slight risk-off tone in FX markets: JPY is the strongest, followed by USD, while GBP and CAD are among the weakest.
  • The BoE left rates and QE unchanged as widely expected, an in a unanimous vote. In the Quarterly Inflation Report, the Bank has made changes to inflation and growth forecasts, raising the former and lowering the latter. However, the BoE didn’t give a clear guidance on monetary policy and its response to whatever form Brexit takes will not be automatic, it said, and rates could go in either direction. GBP came off its lows after hitting a new 2019 low earlier.
  • After the Fed’s hawkish rate cut, the market is now evenly split on whether we'll see a follow-up cut in September. As such, upcoming US (and global) economic data will be crucial over the next 50 days, starting with ISM manufacturing PMI today and NFP on Friday.


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