USD/JPY has been the most notable mover this week, with the pair breaking above 2007 highs at 124.14 to reach its highest level since December 2004. Continued divergence in central bank policy combined with technical breaks led the pair to reach highs o f 124.46, with analysts at JP Morgan forecasting a medium term target of 124 - 126.

Elsewhere, GBP has weakened notably this week, falling below the 1.5300 handle to give back all post - election gains seen since the beginning of the month. Soft UK GDP ( Q/Q 0. 3% vs. Exp. 0.4% , Prev. 0.3%) contributed to the bearish sentiment in GBP, with analysts at BNP Paribas suggesting some participants are concerned with the eventual EU referendum, describing it as the `elephant in the room`. Next T hursday sees the BoE rate deci sion, however the 9 - 0 vote to keep rates at 0.5% with the last few months ’ minutes suggest ing a change in rates is very unlikely.

USD ends the week in positive territory after seeing strength as a result of higher than expected components in US Durable Goods Orders on Tuesday , however the greenback has seen relatively choppy price action in the latter half of the week. Elsewhere, EUR ends the week relatively flat, with attention next week likely to focus on Greek payments to the IMF. The re have been conflicting comments throughout the week from the parties involved in negotiations, with Greece suggesting a deal is close, while Eurogroup members have continued to reiterate that many factors still need to be discussed. With the first Greek payment scheduled for the 5 th June and the option of withholding payments for a month before officially defaulting being a real possibility, Greece is likely to remain in focus next week , as well as the ECB rate decision and subsequent press conference on Wednesday.

Finally, antipodean currencies have also seen significant softening, with AUD ending the week almost 200 pips lower as bearish sentiment filter ed through after Australian Private Capital Expenditure ( - 4.4% vs. Exp. - 2.2% , Prev. - 2.2%) printed a 3rd consecutive decline , while Fonterra cut their 2014/15 Farmgate milk payout forecast to weigh on NZD. Tuesday sees the RBA rate decision and while all surveyed analysts are suggesting rates will be kept on hold month, many suggest that another cut this year is likely.

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