Net long USD positions have been growing since the beginning of the week. USDIndexhashitan 11-yearhighonMonday. In our view, the ECB meeting could become a good “excuse” for the market to push with a new dollar rally. US employment and wages data on Friday could render further support for the American currency.
Meanwhile, GBP/USD slipped down towards the 1.5350 mark following the last week’s push to 1.5550, The BOE meeting on Thursday will likely be a non-event. Watch UK inflationary expectations on Friday – the figures could weigh on the sterling.
AUD/USD jumped to 0.7840 as the RBA left rates unchanged at 2.25%, but we see growth limited. Markets will be waiting for a rate cut on the next meeting. The expectations will pressure the Aussie in the coming weeks. Australia is scheduled to release Q4 GDP on Wednesday (forecast: +0.7%, Q3: +0.3%). You should also watch Chinese Service sector HSBC PMI on Wednesday. Even if the data are upbeat, we recommend selling AUD/USD from 0.7900/15.
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