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Week Ahead: Selective USD Gains To Extend Into NFP Release
The policy divergence trade is back with a vengeance and investors are scrambling to buy USD against other G10 currencies. We suspect that the USD resilience will extend into next week ahead of the important US NFP release. The focus, as per usual, will be on earnings data, with investors looking for indications of a continuing build-up of wage pressures that should translate into higher core inflation and further tightening of monetary policy before long. Potential disappointment from activity data next week (eg, GDP and PMI data out of Australia, Canada, Sweden and Switzerland, as well as PMI data out of China, ... (full story)