Key points JPY: BOJ rate hike bets and Fed’s rate cut, along with strategic intervention risks, could bring more gains. GBP: UK’s political stability will be highlighted once again with US political risks escalating. CAD: Another BOC rate cut could put CAD on the backfoot. CNH: No sense of relief from reversal of Trump trades, as economic slowdown remains in focus. The US dollar managed to end the week higher as Trump Trades ensued.
Safe-havens CHF and JPY were also higher while activity currencies such as NOK and NZD underperformed. Our FX Scorecard once again showed GBP topping the chart while NOK and NZD came in at the bottom amid downside inflation surprises. The CFTC positioning data for the week of 16 July saw speculators cut the long positioning in US dollar by 33%. Longs were added to GBP, EUR and AUD, while shorts were covered in JPY. NZD long positioning was cut, and shorts were added in CAD and CHF.