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  • Price action and flows have been mixed since the news that Fed Chair Powell has been nominated for a second term. USDJPY broke above 115, but retraced pretty sharply on the London open. Our net USD flow was a sell of around $500 mn in Asia, although the biggest flows were from bank clients and macro still added to USD longs in USDJPY, EURUSD, USDCNH and AUDUSD - perhaps topping up the trimming seen when the Fed decision was extended to "before Thanksgiving". The most notable flow has been in XAUUSD, with fast money selling, but there have been some encouraging signs of longer-term money buying.

  • The November FOMC minutes due Wednesday will be searched for any signs that a faster taper will be considered at the December meeting, which could be enough to lift USD further, but if there isn't any new news soon I expect the market will be inclined to start trimming.




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