Risk Currencies Close the Week on Weakness

In a sign of risk appetite declining, EUR/JPY dipped despite Euroland GDP numbers coming out above consensus. While easy to ascribe the plunge to weak US consumer sentiment, it's interesting to see movement even on more stable pairs.

Separately, the yen closed out on strength versus most commodity currencies as it increasingly becomes the China hedge. As we noted in BRL weakness before, the real dipped for a weekly loss against the dollar for the first time in over a month and seems poised for further weakness.

Inflation continues to be a fading concern in both developed and developing countries as 10 year yields dropped in both the US and Germany.

The coming week's open will be watched very closely to see how this plays out.