Relative to the rest of Q1, this week has been relatively sanguine for FX markets. The dollar saw the end of the quarter out on a strong footing as European nations extended or re-entered tighter lockdown measures, while President Biden announced a $2trn infrastructure package. The US 10-year climbed to touch a fresh post-pandemic high at 1.7742% but failed to hold that level, while ECB President Christine Lagarde took an even more combative approach towards European yields. With most markets breaking for a long weekend, next week looks to be another where thin liquidity in markets could exacerbate marginal moves on the back of light economic data and events. Looking ahead to next week’s calendar, Turkey’s CPI data on Monday and the release of central bank meeting minutes stand out.
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