Volatility in FX markets wasn’t amiss despite a shortened week for some European and Asian investors. Monday saw the dollar decline after poor ISM data, while a swathe of central banks throughout the week meant the headlines continued to roll in for traders. On Tuesday, Treasury Secretary and Former Fed Chair, Janet Yellen, cast eyebrow-raising comments about the US economy potentially overheating and the need to raise rates, although no time frame was given. However, Friday’s Nonfarm Payrolls data undershot expectations substantially and threw cold water over this argument, with the dollar getting drenched as a result.
Next week, the focus remains on central bank policymakers as market speculation regarding policy normalisation remains elevated. In the week ahead, we take a look at Banxico’s upcoming policy decision as well as recent Fed commentary and the upcoming data calendar.
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