FOREX UPDATE : USD

USD Fed officials to speak this week.

Currency markets were flat on Friday in the absence of any new economic developments, and the EURUSD trade a 1.2780-1.2827 range, while USDJPY traded between 116.08-116.54. It's a moderately heavy data week in the US, and in general we expect the numbers to support market views that the economy is slowing, with contained price pressures.

Fed speakers will also be of interest with Fisher, Hoenig, Kroszner and Poole all scheduled, and the market will be sensitive to any changes in tone from the very consistent message sent over the past two months.

We expect the USD to continue to struggle as steady erosion of carry advantage and a less favorable environment for carry trades leaves the currency vulnerable to long running structural issues.

Also of note will be possible vote on the Graham/Schumer China tariff legislation in this final week before Congress recesses. Senator Schumer has vowed to press for a vote, but it is far from certain that a vote will be held. While even approval by the Senate would leave the legislation far from becoming actual law, a yes vote would be quite negative for the USD.