FX flows are +2% from Friday (and +9% vs the 5-day average) to start what should be a busy week, with a number of central bank decision due. USD bias is mixed so far, with macro buying offset by asset manager and retail selling.
In G10, the feel from trading desk is that USDs are likely to be bid going into the FOMC this week, with USDJPY a particular focus. This is yet to play out though; as USDJPY interest so far has been mainly selling from asset managers and retail.
In EMI we've seen macro buying USDs vs CNH; HKD; SGD and KRW; while asset managers have sold USDs vs KRW and IIDR. USDCNH spot retraced from the Friday night high and has been hovering in a tight range below 6.4050. The trading desk thinks the market is still short USDCNH; so there may be better risk-reward in buying on dips into the FOMC and US payrolls later this week.
Source: UBS
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