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Forex Weekly Outlook October 13-17

Forex Weekly Outlook October 13-17

The US dollar took a hit, finally correcting its gains, but it didnt fall too far. UK inflation data, Mario Draghi and Janet Yellens speeches, US Retail sales are the major events on our calendar for this week. Here is an outlook on the main market movers coming our way.

Despite continuous positive US data, the FOMC minutes defied expectations for a possible rate hike in the near future, sending the dollar down. The minutes revealed a debate on the necessary normalization period, which the hawks considered too long. Fed minutes also showed that some policymakers feared a stronger dollar will generate downward pressure on inflation and that global economic growth is on a downward trend. Will the dollar continue to decline? In Europe, German numbers were certainly weak, but that didnt hurt the euro as much as Draghis repeat of his commitment to battle low inflation and his words about a rate hike not coming before 2017. Comments about the yen kept the Japanese currency bid and the Aussie recovered despite wobbles in its employment data. Canada enjoyed strong job growth.

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