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It was another week of risk-off vibes as negative covid-19 updates continued, as well as on inflation fears. Safe havens were able to win out in this environment, but the Kiwi was able to buck the trend and take the top spot among the majors thanks to a hawkish move from the Reserve Bank of New Zealand.

Notable News & Economic Updates:

Intermarket Weekly Recap

Dollar, Gold, S&P 500, 10-yr Treasury Yield, Bitcoin, Oil
Dollar, Gold, S&P 500, 10-yr Treasury Yield, Bitcoin, Oil

Safe havens win out the financial markets week as traders likely continued to focus on the recent negative covid-19 developments. Recent headlines have pointed to rising case counts, igniting calls by governments to reinstate various measures to slow the spread from renewed mask mandates to full lockdown protocols.

These measures likely lead to speculation that economic growth is likely to slow, raising the level of uncertainty for traders as this conflicts with the idea that we will see global monetary policy tightening soon as inflation data came in hot from around the world.

Overall, it looks like the risk-off camp won out the week as safe haven assets like gold, the U.S. dollar, and Treasury bonds stayed green through the latter half of the week, while oil, crypto, bond yields and equities drifted lower.

In the forex market, we saw a clearer display of the level of uncertainty as most major currencies saw choppy, mixed price action. But there was an outlier among the group as the New Zealand dollar caught a strong bid going into the Wednesday session after the RBNZ announced an end to their quantitative easing program, earlier than expected. This bullish sentiment on the Kiwi was later reinforced on Friday after data showed inflation surged, the fastest pace since 2011.

The Bank of Canada also gave their latest monetary policy statement this week, and while it wasn’t as hawkish as the RBNZ, we did see the BOC reduce their rate of bond purchasing to C$2 billion per week. But unlike the RBNZ, the BOC sounded a bit cautious on their outlook as the reduced their 2021 growth forecast from 6.5% to 6.0%. This is likely why we didn’t get the same bullish outcome for the Loonie, and likely why the Loonie was the biggest loser of the week, on top of weaker-than-expected Canadian jobs update and lower oil prices.

USD Pairs

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart

GBP Pairs

Overlay of GBP Pairs: 1-Hour Forex Chart
Overlay of GBP Pairs: 1-Hour Forex Chart

EUR Pairs

Overlay of EUR Pairs: 1-Hour Forex Chart
Overlay of EUR Pairs: 1-Hour Forex Chart

CHF Pairs

Overlay of CHF Pairs: 1-Hour Forex Chart
Overlay of CHF Pairs: 1-Hour Forex Chart

CAD Pairs

Overlay of CAD Pairs: 1-Hour Forex Chart
Overlay of CAD Pairs: 1-Hour Forex Chart

NZD Pairs

Overlay of NZD Pairs: 1-Hour Forex Chart
Overlay of NZD Pairs: 1-Hour Forex Chart

AUD Pairs

Overlay of AUD Pairs: 1-Hour Forex Chart
Overlay of AUD Pairs: 1-Hour Forex Chart

JPY Pairs

Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart