US dollar ended lower due to threat from North Korea and hurricane. With the continued downgrading of the chances of another rate hike this year will impose even further losses of dollar in coming weeks. Lonnie turned out to be the best performing currency last week due to unexpected rate hike of 25bp by BoC which triggered both of our short term and long term targets on shorting EURCAD (from last week’s analysis) concurrently after the surprising news. Tightening may continue due to improved economic conditions.
All eyes on next week SNB and BoE monetary policy meetings where both central banks are expected to maintain current interest rates. However, SNB may continue to express concern about strong CHF thus we will hold our last week long position on GBP/CHF to targets level of 1.2560 and 1.2660. In view of dovish RBNZ still weigh on Kiwi, we expect NZD/JPY to be weakened till 77.80 first followed by key support area of 76.60-76.30 in long term.
This week key economic events:
