BoC in focus, risk on

Frank Walbaum FX Strategies.Asia

Important news this week

Wed, 15th, 14:30 CET US Core Producer Price Index.
Wed, 15th, 15:45 CET CA BoC rate Statement.
Wed, 15th, 16:00 CET US Fed Chairman Warsh Testifies Before Senate.
Thu, 16th, 08:00 CET UK Gross Domestic Product.

Risk-on sentiment returns as Dollar weakens

Risk appetite has improved as the US Dollar continues to trade on the back foot, providing support for equities and higher-risk assets. The US Dollar Index (DXY) remains trapped between key technical levels on the weekly chart, leaving traders waiting for the next decisive breakout. Should the Dollar recover from current levels, profit-taking across equities and other risk assets could quickly emerge. For now, however, weaker Dollar flows continue to underpin market sentiment.

Equity markets remain well supported, while cryptocurrencies are extending their recovery. Bitcoin has moved back above its 50-day moving average, strengthening the technical outlook, while Ethereum remains below its own 50-day average but continues to recover. XRP is also showing improving momentum as investors gradually increase exposure to digital assets. In contrast, precious metals are drifting lower as capital rotates into risk assets, reducing safe-haven demand despite the softer Dollar.

Market talk

FX markets remain active despite limited macroeconomic news. USDJPY continues to move higher despite the weaker US Dollar, highlighting persistent Yen weakness and increasing the likelihood of a technical breakout if current momentum continues. Meanwhile, the Canadian Dollar is strengthening ahead of this week's Bank of Canada meeting, with traders positioning for guidance on future monetary policy. Overall, markets remain in a constructive risk-on environment, although a renewed Dollar rally could quickly trigger profit-taking across equities, crypto, and other higher-risk assets.

Tendencies in the markets

Equities positive, USD weak, BTC positive, oil rising, Silver weak, Gold weak.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

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