It's been a mixed week especially for dollar and yen, says Saxo Bank head of FX strategy John Hardy.
The markets big focus right now is on the Trump administration policy and less on the Federal Reserve. The Trump speech to US congress on policy priorities February 28 is the next big test for the dollar. We could of course get more subplots if recent wobbles and risk appetite are felt across the board, says Hardy.
Also watch for retrenchment risk appetite next week.
Yen pairs are getting interesting to look at. The yen development next week is a product of whether interest rates continue to head back lower and global risk appetite, according to Hardy.
It’s been a disappointing week for sterling, says Hardy. Post-Brexit high activity in retail sales was about consumers predicting a collapse in sterling, and we’ve seen a weaker sterling as reaction to that.
Sterling is looking for support at 1.2350 in GBPUSD and above 0.86 for EURGBP.
It’s a wobbly week ahead of bigger event risks to come, Hardy concludes.