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Week Ahead: A Make-Or-Break Week For The FX Divergence Trade
We could be at an important junction that could determine the price action in the FX markets going into year-end. The IMF meetings of central bankers and finance professionals in the next few days should tell us more about what policy action will be taken to address the growing downside risks to global growth and inflation. We worry that the lack of stimulus plans, especially in China, could undermine the latest nascent recovery in risk sentiment and drag down G10 riskcorrelated and commodity currencies. Disappointing trade data out of China next week should strengthen investors’ defensive positioning. Next week ... (full story)