Our measure of the dollar, the Cable FX Macro Dollar Index, posted marginal losses this week. Price action was contained into risk events in the form of CPI data and the FOMC June meeting. The sharp losses on the softer than expected CPI were reversed after the FOMC posed hawkish, political risks in the EU and a slightly dovish BoJ saw the dollar extend its recovery
Mixed trading in the G10 was led by the Swiss franc, CHF recorded gains of 0.7% to the dollar and 1.5% to the euro this week. We can say that most of the recovery in the dollar was due to weakness in the euro and the yen. Sterling posted marginal losses of 0.3% as we head into tier-1 data from the U.K.
Despite a tone of resiliency from our dollar measure, the Cable FX Macro USD Spreads Index turned lower this week. The front-end of the UST curve was heavily bid, the 2-year yield recorded its second-worst week of the year, down almost 20bps to 4.7044%
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