ING Research highlights 2 emerging trend in G10 FX market.
"In FX, most G10 crosses have failed to find a clear direction this week, although two trends continue to emerge. First, the currencies of big energy exporting countries are still receiving some support. NOK and CAD are the two most notable examples in G10, but AUD (Australia is a large coal and natural gas exporter) is also emerging as an outperformer. ..We’ll keep an eye on Australia’s jobs data tonight: it looks like we’ll see another negative reading as virus restrictions hit hiring in September, which should keep RBA rate expectations depressed and AUD upside capped for now," ING notes.
"The second clear trend is a bearish one on the yen. Japan’s position as a heavy energy importer, paired with the recent sell-off in US treasuries, is a toxic combination for JPY, and USD/JPY also seems to be receiving some extra support from breaking key technical levels. After breaking above the 2020 and 2019 highs, more support may come if we see a break above the 114.55 2018 high. At this stage, we could see the USD/JPY rally extend to 115.00 in the near term," ING adds.