Article summary: It was a big week for forex markets as volatility surged along with the Yen, but the coming week could see both give back some of their recent gains.
The Dollar went from best-to-worst in a hurry as a substantial Yen surge put it to its worst weekly decline since 2011. But a calm in market conditions could bring short-term relief.
The weak performance against the CHF and the JPY raises concerns about further gains for the Euro. The economic docket is light, and volatility is likely going forward irrespective.
The Japanese Yen gained ground ahead of the Bank of Japan (BoJ) interest rate decision, with the USDJPY tumbling to a fresh monthly low of 94.97, and the near-term correction may continue to take shape in the week ahead should the central bank sticks to the sidelines.
The Australian Dollar remains vulnerable to an adverse shift in monetary policy expectations but extreme positioning leaves the risk of a reversal elevated.
Gold was softer this week with the precious metal off by 0.48% to trade at $1380 at the close of trade in New York on Friday.
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