FX markets rangebound; commodity pairs lead
Currency markets were relatively quiet overnight, with the US dollar showing signs of life following a protracted sell-off. The Japanese yen is on the back foot, losing ground against all the other majors, underperforming as traders weighed ongoing trade talks and rate policy dynamics.
The commodity currencies — the Australian and New Zealand dollars — were noticeably firmer overnight, supported by improving sentiment and a bounce in risk appetite. Sterling held steady, with Bank of America suggesting a return to pre-Brexit levels could be in play next year.
Some traders have speculated that month-end dollar buying may feature in today’s flows, reversing out profitable shorts against the currency.