Choppy trading in the countdown to month end

We saw some US dollar demand into the London fix all week and that was a preview of today’s flows, as the dollar accelerated into the final fix of the month.

USD/JPY touched a session high up 76 pips to 145.74, while the Australian dollar also fell to a session low at 0.6775. The euro and pound are slightly above the earlier lows.

It’s tough to make sense of market moves at month end as flows top fundamentals. Looking ahead, September seasonals are poor for risk trades but that doesn’t always transfer into the types of moves you would expect in FX. Instead, looks for a healthy dose of fundamentals to dominate, including non-farm payrolls next week and rate decisions from all the majors, starting with the Bank of Canada on Wednesday.

The loonie is particularly volatile today after a decent GDP report. Note that it’s a holiday in the US and Canada on Monday so the flows in USD and CAD are particularly strong today.

This article was written by Adam Button at www.forexlive.com.