The major currencies were a mixed bag this week, and it looks like it was a risk-on vibe with the Canadian dollar rising to the top while the yen and euro were net red.
There were no major catalysts to drive the positive leaning bias across the major asset classes, but we did get positive updates in business sentiment and confirmation once again that central banks will maintain simulative measures.
Notable News & Economic Updates:
Risk-on Sentiment this week
As we can see in the hourly chart, traders leaned long in most asset classes this week, with the except of gold coming in just under break even at the Friday close.
There were no major catalysts in terms of surprise news headlines or economic updates to get traders into a bullish mood, but it’s more likely a combination of improving business sentiment data and economic updates as the world continues to recover from covid that had traders leaning risk-on.
We also saw the Federal Reserve and the Bank of Japan signal that easy money policies were here to stay, which likely helped boost the risk-on vibes as well while momentarily taking the Greenback and bond yields lower on Wednesday.
And across the major currencies, it looks like risk sentiment plus counter currency flows were the main drivers for the week. The Loonie took the top spot, likely continuing to benefit from last week’s bullish statement from the Bank of Canada.
The Japanese yen was the big loser, likely a reaction to this week’s dovish Bank of Japan statement on Tuesday, offering a gloomy look on the economy due to the pandemic. And the euro was also a definitive loser on the week as we saw both disappointing economic/sentiment data from Europe, as well as data showing that covid continues to be a strong threat in the region despite falling case numbers.
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