Traders’ Favorite Currency Risk Gauge Faces a Pivotal Week
- Aussie dollar-yen threatens to break seven-month downtrend
- Australia 1Q CPI, BOJ decision to determine FX pair’s outlook
Photographer: Brendon Thorne/Bloomberg
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This week may prove crucial for the currency market’s favorite sentiment gauge — the risk-sensitive Australian dollar versus the haven yen — as investors wait to see if it can finally break out of its seven-month downtrend.
The Aussie dollar-yen is in focus after it rebounded from a one-year low last month as traders put aside concerns over the global banking sector. However, the pair may renew its decline if data on Wednesday show Australian inflation cooled off in the first quarter and if the Bank of Japan leaves room for hawkish tweaks to its super-easy policy at Friday’s meeting.