Trading on Thursday and early Friday appeared to suggest that risk was back on the agenda for the global forex markets after both the dollar and the pound struggled in the face of victories for emerging currencies.
The euro was up significantly against the dollar over the course of trading, and at one stage touched the $1.18 border in the EUR/USD pair.
The dollar index, which compares the greenback’s performance to other important global currencies, went down by 0.1 percent and touched 93.82.
The dollar’s decline is due in part to the resilience the market has now built up to ongoing trade battles between the US, China and elsewhere.
It’s also due in part to decisions in the major emerging market Turkey to take steps to secure its currency after a month or two of rocky performance.
The Turkish lira has been rising recently, suggesting that traders are cautiously edging towards greater risk.
Perhaps the main loser, aside from the dollar, was the British pound. It managed to crash against the dollar even in the face of global anti-dollar shifts, and it dropped 0.4% to $1.3217.
This development came after the leader of the European Council, Donald Tusk, said that UK Prime Minister Theresa May’s proposals for post-Brexit co-operation between Britain and the EU wouldn’t work.
Looking ahead to next week, it’s clear that there’s a lot on the cards for the forex markets as trading resumes on Monday.
Some currencies may be a little more sluggish than normal as Monday begins thanks to a number of holidays. Japan celebrates its Autumnal Equinox Day, while China has its Mid-Autumn Festival and Australia marks the Queen’s Birthday.
However, Germany will be very busy with a number of significant data releases, including the current IFO assessment for September, as well as expectations and business climate information.
At the end of the day, the Bank of Japan will release its most recently monetary policy meeting minutes, which will shed some light on the bank’s thoughts on their interest rate. On Tuesday, this will be followed up by a speech from the Bank’s Governor, Haruhiko Kuroda, at 5.30am GMT.
Over in the US, Tuesday will see a number of significant releases like the month on month housing price index for July, which is expected by analysts to be on the way up from 0.2% to 0.4%.
The day will be rounded off by trade balance data for August in New Zealand, which is out at 10.45pm GMT.
On Wednesday, there’ll be a British data release pertaining to the country’s housing market. The British Bankers’ Association’s mortgage approvals level for August will come out at 8.30am GMT and is expected to show a rise from 39,584 to 40,312.
Wednesday will also see two significant global interest rate decisions. At 6pm, the monetary policy committee of the US Federal Reserve will issue its decision – and greenback traders will finally discover whether or not it will alter the 2% rate at which it currently sits.
Following this will be another interest rate decision from the Reserve Bank of New Zealand, which will issue a statement on its rate, currently sitting at 1.75%, at 9pm GMT.