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Weekly FX Chartbook: Fed’s hawkishness meets BOJ’s dovishness

Forex 5 minutes to read
Charu Chanana 400x400
Charu Chanana

Chief Investment Strategist

Summary:

  • USD: Fed has a high bar to surprise hawkish, dollar to stay sideways
  • JPY: 160+ zone in USDJPY could be tested if no intervention
  • AUD: RBA rate hike risks and upbeat global risk sentiment to support
  • CHF: CPI miss could increase odds of June rate cut
  • CNH: Devaluation risks on watch
29_FX_Weekly
The Fed-BOJ divergence has taken a heavy toll on JPY again last week, while Gold and Silver correction ensued.
29_FX_Momentum
Our FX Scorecard shows momentum increasingly negative in yen while AUD remains upbeat as RBA rate hike is back on the table after Q1 inflation beat.
29_FX_Positioning
Forex COT to the week of April 23 saw dollar long positioning extending by a further 27%. EUR positioning turned to a net short for the first time since September 2020, JPY short positioning extended to an 18-month high while GBP shorts were the highest since September 2022. Shorts were only covered in AUD and CAD.
29_FX_Outlook

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Other recent Macro/FX articles:

29 Apr: Global Market Quick Take - Asia
26 Apr: JPY: Bank of Japan adds to reasons to stay bearish yen
25 Apr: JPY: Accelerated sell-off; can the BOJ halt yen's decline?
25 Apr: Thematic Podcast: Deciphering Asian forex interventions
23 Apr: Technical Update - USDJPY ticking higher. EURJPY and AUDJPY at key resistance levels. GBPJPY range bound, bullish breakout?
23 Apr: GBP: What can drive the next leg lower?
22 Apr: Weekly FX Chartbook: Stretched USD strength is raising intervention alert
19 Apr: FX 101: Using FX for portfolio diversification
18 Apr: JPY: Intervention alert, or a BOJ alert?
16 Apr: Chinese Yuan’s Double Whammy - Dollar Strength and Yen Weakness
12 Apr: Riding the Fed-ECB Policy Divergence
11 Apr: ECB rate decision: How to trade the event
9 Apr: CAD vulnerable as market underprices dovish Bank of Canada risks
9 Apr: US inflation report: How to trade the event
8 Apr: Macro and FX Podcast: NFP, CPI, ECB and Japan
8 Apr: Weekly FX Chartbook: US CPI, geopolitics and dovish pivots from ECB and Bank of Canada in focus
3 Apr: Chinese yuan bears are undeterred by PBoC’s grip
3 Apr: FX Quarterly Outlook: The rate cut race shifts into high gear
25 Mar: Macro & FX Podcast: Swiss central bank surprises; PCE and China
25 Mar: Weekly FX Chartbook: The return of US exceptionalism
22 Mar: Swiss National Bank’s bold move will kickstart the G10 rate cut cycle
20 Mar: Thematic Podcast: Japan's route to abolish negative interest rates
20 Mar: Japan’s exit from negative rates: Implications for the economy, yen and stocks
8 Feb: FX 101: USD Smile and portfolio impacts from King Dollar

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