Global risk appetite continued to improve last week, thanks in part to decent Chinese data (including a further pick-up in loans growth) and the S&P 500 is close to the all time record high, set last September.
The more-risk-sensitive Australian Dollar and Euro rebounded 0.7% and 0.4%, respectively, in trade-weighted terms, as did emerging market currencies, while the Dollar and safe-haven Swiss Franc weakened by 0.6% and 0.8%, respectively. The EUR/USD cross as a result managed to edge above 1.13 for the first time since the 26th March.
Nevertheless volatility in FX markets remains subdued as markets figure out what major central banks’ next steps will be. In particular the GBP/USD cross is treading water around the 1.31 mark despite the never-ending Brexit saga and associated uncertainty.
