A lot of bullish commentators are talking about a recovery being in the works, and they may very well be right. But it is not going to look like any recovery worthy of the name.
The euro looks vulnerable in the week ahead as headline inflation figures point to the increasing likelihood of deflation while a the US Treasury holds a record-setting bond auction that stands to boost the dollar at the expense of the single currency.
Direction from the Japanese yen is often the product of risk appetite, and the fundamental outlook for next week doesn’t suggest this essential correlation will break any time soon.
A report by the SNB showed foreign currency holdings rose 46% in the second-quarter to its highest level in at least 12-years as the central bank attempts to stem the appreciation in the franc.
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