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traders seek to close positions before US jobs report, making bets against the trend. The last two weeks, such a trend was rally in the dollar, so in the recent session we saw the USD retreat from highs.
Investors do not understand how to react to currency wars. For a long time, they have focused solely on the monetary policy of central banks, and now they are asking themselves whether regulators will take into account the risks of a slowdown in the global economy? If so, last year's strategy, based on the normalization of monetary policy by central banks-competitors of the Fed, will fail in 2018.
Since the beginning of this year, the yen has strengthened by almost 7% against the dollar, which creates serious problems not only for exports, but also for inflation. I think to restrain "bears" on USDJPY pair is possible only in case of de-escalation of the conflict between Washington and Beijing
The single currency dipped yesterday due to Draghi's comments. In his speech after the decision on the rate, the head of ECB noted that trade conflicts represent risks for the economy and markets. However, the biggest impact on the single currency was made by comments that the ECB intends to keep low rates for a long time after the end of QE.
It seems that the markets are going to do everything possible to return to the "golden mean" scenario for global risky assets, in the hope that the recent shocking volatility was a one-time incident involving an absurd level of debt load amid volatility.