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Kathy Lien

Kathy Lien

Kathy Lien is an Internationally Published Author and Managing Director of BK Asset Management. Her trading books include the following: 1) For beginners, “The Little Book of Currency Trading (2010, Wiley).” 2) THIRD edition of the highly acclaimed, internationally published “Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings (2015, Wiley).” 3) Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game (2007, Wiley) 4) High Probability Trading Setups for the Currency Market E-Book (2006, Investopedia)

Articles by Kathy Lien

Dollar – Why it Failed to Rally on Strong Retail Sales

1 day ago

Dollar – Why it Failed to Rally on Strong Retail Sales
Daily FX Market Roundup 04.15.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar struggled to rally on Thursday despite very strong U.S. economic reports. According to the latest releases, the U.S. economy roared back to life in March and early April. Retail sales, the most anticipated piece of U.S. data this week blew expectations as stimulus checks and vaccinations fueled robust demand. Consumer spending jumped 9.8 percent in the month of March, easily outpacing the market’s 5.9 percent forecast. This was the strongest increase since May of last year. Gas and auto sales contributed to the rise but spending ex autos still rose 8.4 percent. Jobless claims also dropped almost 200K to

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Dollar – Vaccine Concerns Overshadow CPI

3 days ago

Dollar – Vaccine Concerns Overshadow CPI
Daily FX Market Roundup 04.13.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The biggest news on Tuesday turned out to be concerns about Johnson & Johnson vaccine and not the U.S. inflation report. The country’s two health agencies (FDA and CDC) recommended halting use of the one shot vaccine after 6 cases of a rare but deadly blood clot disorder. Six cases is small when measured against the nearly 7 million Americans that have received the Johnson & Johnson vaccine but coming off the heels of similar concerns related to AstraZeneca’s shot, regulators are being very cautious as the disorder may appear up to 2 weeks from vaccination. Even if the FDA and CDC deem the vaccine safe after an investigation period, this

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Euro Bounces – How Much Juice is There?

4 days ago

Euro Bounces – How Much Juice is There?
Daily FX Market Roundup 04.12.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Euro kicked off this busy trading week with modest gains against the U.S. dollar. Despite continued lockdowns in some of the region’s biggest economies, slow vaccine rollout and lower growth forecasts from France and Spain, the single currency has been extraordinarily resilient. It quietly moved higher since the beginning of the month rallying from 1.17 to 1.19. Better than expected retail sales data helped extend the pair’s gains on Monday. Consumer spending rose 3% in the Eurozone in February, double the market’s expectations. Spending in January was also revised up to -5.2% from -5.9%. This follows last week’s upwardly revised German

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Central Bank Events to Watch this Week

11 days ago

Central Bank Events to Watch this Week
Daily FX Market Roundup 04.05.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The first full trading week of April started quietly with many markets closed for Easter Monday. It wasn’t until the start of the New York trading session that the U.S. dollar started to move. Despite Friday’s strong jobs report, today’s better than expected non-manufacturing ISM and an increase in yields, the greenback traded lower against all of the major currencies. This was in many ways an extension from Friday where we saw a lackluster reaction to very healthy labor market numbers.
There are a number of reasons why the dollar kicked off the week with losses from profit taking, a broad based risk rally to concerns about inflation.

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Nearly 1 Million Jobs but Dollar Barely Budges – Here’s Why

14 days ago

Nearly 1 Million Jobs but Dollar Barely Budges – Here’s Why
Daily FX Market Roundup 04.02.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The most anticipated event risk this week was the March U.S. non-farm payrolls report. Nearly a million jobs were created, the most in 7 months. Economists were looking for NFPs to rise by 647k and instead it jumped 916k. The unemployment rate dropped to 6%, which was right in with expectations. Such a blowout jobs number should have driven the U.S. dollar sharply higher and while the greenback spiked after the initial release, its gains were modest. A large part of that had to do with Easter holidays in the U.S. and abroad. Equity markets were closed, so not many investors were around to react to the report.

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Will Payrolls Reinforce Dollar’s Dominance?

15 days ago

Will Payrolls Reinforce Dollar’s Dominance?
Daily FX Market Roundup 04.01.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
After rising strongly in March the U.S. dollar kicked off the month of April with losses against most of the major currencies. The sell-off was modest and represents nothing more than profit taking ahead of Friday’s non-farm payrolls report. Jobless claims rose back above 700K but that increase will not draw away from what should be a very strong jobs report. The 4 week moving average continued to fall to its lowest level in more than a year. With restrictions easing across the nation, restaurants expanding capacity and the weather improving, businesses are hiring. Consumer confidence is also at a one year high with private payroll

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Euro Snaps Back But Dollar Still King

16 days ago

Euro Snaps Back But Dollar Still King
Daily FX Market Roundup 03.31.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
March was a tough month for the euro. The single currency fell to its weakest level in 4 months against the U.S. dollar and its lowest level in a year against sterling. Since the beginning of the pandemic, there have been major differences between how the U.S., U.K. and the European Union dealt with the crisis. Early on, Europe went into lockdown quickly while the U.S. dragged its heels which led to faster recovery and strong gains for EUR/USD between May and August. In the winter, they brought back restrictions before anyone else and kept them on longer than the U.S. and U.K. as their vaccine rollout faced setbacks. The currency and

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How will Month / Quarter End Affect the Dollar?

17 days ago

How will Month / Quarter End Affect the Dollar?
Daily FX Market Roundup 03.30.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar traded sharply higher against all of the major currencies on Tuesday with the latest gains taking the greenback to fresh one year highs against the Japanese Yen and 4 month highs against the euro. Currencies are once again taking their cue from Treasury yields, which rose above 1.7% on a 10 year basis to its highest level since January.
With the momentum in stocks waning and investors hungry for any type of yield, rising U.S. rates is drawing everyone’s attention. There’s also the growth and liquidation story – the U.S. is racing ahead with vaccinations and the prospect of a strong second quarter to second half

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4 Reasons for Big Moves in Currencies this Week

18 days ago

4 Reasons for Big Moves in Currencies this Week
Daily FX Market Roundup 03.29.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
It will be another busy week for the financial markets with potentially big moves in currencies and equities. On Wednesday, President Biden will outline his $3 trillion infrastructure plan, which also happens to be the month and quarter end. U.S. non-farm payrolls is scheduled for release on Friday but a number of markets including the U.S. are closed for the Good Friday holiday. Although less participation means there could be more consolidation, that’s unlikely to happen this week as investors brace for the strongest jobs report in at least 5 months.
March has been a good month to be long dollars. Thanks to the country’s

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US Dollar, Stocks Attract More Buyers

21 days ago

US Dollar, Stocks Attract More Buyers
Daily FX Market Roundup 03.26.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
It has been a great week to be long U.S. dollars. The greenback traded higher against all of the major currencies and these gains drove the Dollar Index to its strongest level in 4 months. For the technicians out there, this was also the first time since May that DXY closed above the 200-day simple moving average which is typically a signal for further gains. Mixed U.S. data did not deter investors from driving U.S. assets higher.
Personal spending dropped -1% against a forecast for -0.7% decline. Personal incomes fell -7.1% against -7.3% forecast and the University of Michigan consumer sentiment index was revised up to 84.9 from 83.6.

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EUR/USD Slips to New Lows on Good US Data

22 days ago

EUR/USD Slips to New Lows on Good US Data
Daily FX Market Roundup 03.25.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Stronger than expected economic reports drove the U.S. dollar higher against all of the major currencies. There’s no question that of the G3 currencies (USD, EUR and JPY), the U.S. is leading the recovery and data is beginning to show the benefits of a smooth coronavirus vaccine rollout. Seventy percent of Americans 65 or older have received at least one COVID-19 vaccine dose with more than a third of the overall adult population receiving their first jab. Businesses are reopening and economic activity is accelerating. As a result, jobless claims fell to 684K, its lowest level in more than a year. Fourth quarter GDP growth was also

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Big Week for GBP = Big Losses?

24 days ago

Big Week for GBP = Big Losses?
Daily FX Market Roundup 03.23.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar traded higher against most of the major currencies on Tuesday despite weaker new home sales and cautious comments from Federal Reserve Chairman Powell. Along with his peers, Powell made it clear that they see only a temporary rise in inflationary pressures. Treasury Secretary Janet Yellen avoided market moving comments in their closely watched testimony. For the next 24 hours the focus shifts to Europe where PMI reports are scheduled for release.
This is a busy week for the British pound. Today’s labor market report will be followed by inflation and PMI numbers on Wednesday and retail sales on Friday. Despite fewer than expected

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Time to Buy Euros? Not Yet.

25 days ago

Time to Buy Euros? Not Yet.
Daily FX Market Roundup 03.22.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
One of the best performing currencies today was the euro. After selling off quickly and aggressively in the first week of March from a high of 1.21 to a low of 1.1835 the single currency quietly consolidated above the 200-day simple moving average as dovish comments from the Federal Reserve and an overall demand for high beta currencies halted the slide in the currency. As tempting as it may be to pick a bottom in EUR/USD, now is not the time to buy.
The eurozone is mired in troubles. They’ve lagged the U.S. and U.K. in vaccine rollout and as a result of that delay, new coronavirus cases are on the rise, forcing countries across the region to

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For Dollar, Fed Action Speaks Louder than Words

28 days ago

For Dollar, Fed Action Speaks Louder than Words
Daily FX Market Roundup 03.19.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Actions speak louder than words for U.S. dollar traders who sent the greenback sharply higher after the Federal Reserve said the temporary change to the supplementary leverage ratio or SLR for banks “would expire as scheduled on March 31, 2021. The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.” This means that banks will have to hold more capital or sell bonds, which is exactly what we saw despite speculation that this would be the central bank’s decision. Yet Fed Chairman Powell was quick to remind investors that the

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Fed Can’t Keep the Dollar Down

29 days ago

Fed Can’t Keep the Dollar Down
Daily FX Market Roundup 03.18.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar traded higher against all of the major currencies on Thursday, erasing most of its post FOMC losses. The Federal Reserve has no plans to raise interest rates until 2023 but the recovery in the dollar and rise in Treasury yields tell us that investors continue to be drawn to the economy’s positive outlook. Today’s strong rise in the Philadelphia Fed index reinforces the central bank’s upgraded economic projections. The Philly Fed measure jumped from 23.3 to 51.8, its best reading in 48 years. Month after month, we’ve seen manufacturing drive the recovery and it wont be long before services follow. The Fed can’t keep the dollar down

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FOMC Preview – When will Powell Lose His Cool?

March 16, 2021

FOMC Preview – When will Powell Lose His Cool?
Daily FX Market Roundup 03.16.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
In a week with heavy data, Wednesday’s Federal Reserve monetary policy announcement will be the most important event risk. The Fed is set to update its economic projections and their outlook for interest rates. Chairman Powell will hold his usual press conference where he will undoubtedly be peppered with questions about yields.
The U.S. dollar shrugged off the February retail sales report and consolidated its gains ahead of the rate decision. The greenback avoided losses against most of the major currencies. USD/JPY and USD/CHF succumbed to profit taking. Retail sales dropped -3% in the month of February, which was

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FX Outlook – What to Expect for FOMC, Retail Sales and BoE

March 15, 2021

FX Outlook – Biggest Risks from FOMC, Retail Sales and BoE
Daily FX Market Roundup 03.15.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
This will be a busy week for the forex market. There are three central bank meetings, U.S. retail sales, New Zealand Q4 GDP, Australia’s employment report and Canadian retail sales scheduled for release. The main focus will be the Federal Reserve’s monetary policy announcement but every one of these events could have meaningful impact on currencies that could lead to interesting cross moves. The U.S. dollar kicked off the week with gains against most currencies despite a pullback in Treasury yields. Manufacturing activity in the New York region accelerated with the Empire State index rising to 17.4 from 12.1. Better

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ECB Surprises with Faster Bond Buys, Euro Unfazed

March 11, 2021

ECB Surprises with Faster Bond Buys, Euro Unfazed
Daily FX Market Roundup 03.11.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
To the market’s surprise, the European Central Bank announced plans to purchase bonds at a “significantly higher pace” over the next quarter. The decision was motivated by the recent rise in yields and concerns that “headline inflation is likely to increase in the coming months,” according to central bank President Christine Lagarde. Today’s move widens their distance with the Federal Reserve who does not see the increase in bond yields and inflation as a problem. This comes as the European Union’s vaccine rollout faces more setbacks with delivery delays and new concerns about AstraZeneca’s vaccine. The vaccine’s use was halted

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Big ECB Day Ahead – What to Expect for Euro

March 10, 2021

Big ECB Day Ahead – What to Expect for Euro
Daily FX Market Roundup 03.10.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar traded lower against most of the major currencies on Wednesday. According to the latest report, inflationary pressures are on the rise but not as quickly as investors feared. U.S. consumer prices grew 0.4% in the month of February, which was in line with expectations. Core prices on the other hand rose only 0.1% against 0.2% forecast. Going into this report, U.S. dollar traders were positioned for a strong number and when they saw the muted report, they took the greenback lower against most of the major currencies. Although prices are expected to rise further in March, for now, inflationary concerns eased somewhat,

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Will US CPI Drive Dollar to Fresh Highs?

March 9, 2021

Will Realized Inflation Fears Drive Dollar to Fresh Highs?
Daily FX Market Roundup 03.09.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. traded lower against all of the major currencies. The lack of U.S. economic releases meant that the dollar took its cue from yields. After hitting a high of 1.6%, ten-year Treasury yields pulled back as traders wait for the stimulus bill passage and Wednesday’s inflation report. The House plans to vote on the $1.9 trillion relief package tomorrow and while there’s always risk that investors will sell the news, the economic impact of $1,400 stimulus checks will be too significant to overlook for long. The $600 December stimulus payment drove retail sales up 5.3% in January, far higher than economists

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Relentless Dollar Rally Continues as Yields Top 1.6%

March 8, 2021

Relentless Dollar Rally Continues as Yields Top 1.6%
Daily FX Market Roundup 03.08.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Investors have a voracious appetite for U.S. dollars this month as the Dollar Index climbed to its strongest level in 4 months. Over the weekend, the Senate passed a $1.9 trillion stimulus bill which is expected to pass the House tomorrow and signed by President Biden before the end of the week. The passage of this bill has been eagerly awaited and now that it is pretty much a done deal, investors are starting to think about how stimulus checks will be spent.
The $600 stimulus checks sent out at the very end of last year saved January retail sales. This time, qualified individuals and families will receive a one time check

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US Dollar Hits New Highs after Strong Jobs Report

March 5, 2021

US Dollar Hits New Highs after Strong Jobs Report
Daily FX Market Roundup 03.05.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar hit new highs on Friday after a strong U.S. jobs report. The greenback extended its gains against all of the major currencies with USD/JPY rising to its strongest level since June 2020 and EUR/USD falling to its weakest since November. Unlike prior days when there was less uniformity, all of the major currencies succumbed to the dollar’s rally. In fact, investors were bidding up the dollar before the number was released and when it came out, the gains accelerated as the labor market recovery reinforced Federal Reserve Chairman Powell’s optimism and the reflation trade. Stocks recovered from Thursday’s losses with

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Dollar Soars after Powell Expresses Little Concern About Inflation and Rates

March 4, 2021

Dollar Soars after Powell Expresses Little Concern About Inflation and Rates
Daily FX Market Roundup 03.04.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
The U.S. dollar traded sharply higher against all of the major currencies after Federal Reserve Chairman Powell expressed little to no concern about the recent spike in yields. Ten year Treasury yields climbed 4%, closing in on one year high. Stocks crashed in response with the Dow Jones Industrial Average falling more than -300 points. The spike in yields is bad for stocks because higher borrowing costs slows the recovery. The benchmark 30 year mortgage rate for example rose above 3% for the first time since July 2020. Interest rates are still very low but refinancing and demand for new homes will

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US Yields Resume Rise but Dollar is Slow to Follow

March 3, 2021

US Yields Resume Rise but Dollar is Slow to Follow
Daily FX Market Roundup 03.03.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
U.S. Treasury yields came roaring back on Wednesday after a brief consolidation at the start of the week. The nearly 6 percent rise in 10 year rates drove the U.S. dollar higher against most major currencies. However there’s no doubt that the dollar rally is losing momentum as the euro settles with modest losses and sterling outperforms the greenback. U.S. data was also disappointing, raising concerns for Friday’s jobs report. According to private payroll provider ADP, 117K new hires were made in February, significantly less than the 177K forecast. Service sector activity also slowed with the ISM index dropping to 55.3 from

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Strong AUD Could be Problem for RBA

March 1, 2021

Strong AUD Could be Problem for RBA
Daily FX Market Roundup 03.01.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
• #USDJPY Hits 6 Month High
• #EURUSD Hit by Drop in German Yields
• Strong #AUD Problem for RBA
• #CAD Resumes Rally Ahead of Q4 GDP
The month of March kicked off with a strong rally in equities that saw the Dow Jones Industrial Average erase all of Friday’s losses. Ten year Treasury yields resumed their rise and the U.S. dollar rose to its strongest level against the Japanese Yen in six months. However the dollar’s gains were not universal as the improvement in risk appetite drove the Australian, New Zealand and Canadian dollars higher against the greenback.
There are a lot of reasons for investors to be optimistic this month. Spring is

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US Dollar Soars as Surging Yields Attract Massive Demand

February 25, 2021

US Dollar Soars as Surging Yields Attract Massive Demand
Daily FX Market Roundup 02.25.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
• Dollar Soars as 10 Year Yields Rise 10%
• Stocks Collapse, Driving Risk Currencies Lower
• AUD Hit the Hardest by Risk Aversion
• Euro the Most Resilient
• US Personal Income and Spending Numbers Next
The U.S. dollar is reaping the benefits of rising yields. Since the beginning of the year we’ve seen ten year bond yields in the U.S. move from 0.91% to a one year high of 1.56%. This trend started at the turn of the new year but gained significant momentum in the past few weeks. At first, currency and equity traders resisted the move with stocks powering to record highs and the dollar continuing its slide but today,

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Powell Reaffirms Dovishness, Sends Dollar Lower

February 23, 2021

Powell Reaffirms Dovishness, Sends Dollar Lower
Daily FX Market Roundup 02.23.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
• Stocks Erase Gains on Powell’s Comments
• Fed Sees No Rate Hike, No Taper = Broad Based Dollar Decline
• #GBP Breaks 1.41 Despite Mixed Labor Data
• #RBNZ Expected to Leave Monetary Policy Unchanged
•Investors sold U.S. dollars after Federal Reserve Chairman Jerome Powell made it very clear on Tuesday that there will be no interest rate hikes or tapering in the foreseeable future. The U.S. economy is recovering, inflation is on the rise and with more Americans getting vaccinated, the outlook is bright. In fact, Powell expects to raise the Fed’s 2021 GDP forecast to the range of 6%. Yet these improvements are not enough for the

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USD: How Surging Treasury Yields Affects Powell’s Testimony

February 22, 2021

USD: How Surging Treasury Yields Affects Powell’s Testimony
Daily FX Market Roundup 02.22.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
• Fed Chair Powell Delivers Semi-Annual Testimony on Economy Tuesday
• #EUR Rises on Stronger German Business Confidence
• #GBP Hits Fresh Highs but UK Labor Data a Risk
• #NZD Soars after S&P Upgrades Sovereign Rating
• #CAD Climbs to 3 Year High
Federal Reserve Chairman Jerome Powell’s semi-annual testimony on the economy and monetary policy is one of the most important events this week. The broad based decline in the U.S. dollar is a sign that investors expect cautious comments. Approximately 1.7 million coronavirus shots are being administered every day and with 13% of the population receiving a first dose, the U.S.

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GBP, AUD End Week Near 3 Year Highs

February 19, 2021

GBP, AUD End Week Near 3 Year Highs
Daily FX Market Roundup 02.19.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
• #USD Sells Off Despite Stronger PMIs
• #GBP Breaks 1.40 on Stronger PMIs
• #AUD Shrugs Off Weaker Retail Sales
• #NZD and #AUD Hit Highest Levels Since March 2018
• #EUR Rally Supported by Rise in PMI
• #CAD Unfazed by Weaker Retail Sales
There were some big moves in currencies on Friday which was no surprise given the busy economic calendar. GBP/USD rose above 1.40 for the first time since April 2018, while AUD/USD and NZD/USD climbed to their strongest level since March 2018. Investors looked past softer economic reports in favor of stronger releases. The U.S. dollar sold off across the board as stocks rebounded from yesterday’s decline.

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5 Reasons for Big FX Moves on Friday

February 18, 2021

5 Reasons for Big FX Moves on Friday
Daily FX Market Roundup 02.18.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
• #USD Sells Off as Jobless Claims Spike
• #GBP Soars as Traders Eye 1.40, Retail Sales & PMI on Friday
• EURGBP Falls to Lowest Level Since March 2020
• #AUD Supported by Stronger Labor Data
• #EUR Rises Ahead of PMIs
• #CAD Unfazed by Lower Oil and Prospect of Weaker Spending
The post retail sales rally in the U.S. dollar did not last as the greenback resumed its slide against all major currencies on Thursday. This decline was somewhat surprising given the sell-off in U.S. stocks and rise in 10 year Treasury yields which typically coincides with a stronger dollar. However, the pullback was supported by economic data. While the

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