BUZZ-COMMENT-US recap: EUR/USD cedes spotlight to sterling as UK troubles weigh
Sept 18 (Reuters) - The dollar held broadly steady on Friday as EUR/USD returned to the middle of its recent range, while sterling stole the spotlight as fears about Brexit, negative rates and coronavirus outbreaks took a toll .
Sterling's recovery earlier this week merely remedied oversold daily technical studies and Friday's firmer-than-forecast retail sales were outweighed by the other mounting problems .
Another drop toward GBP/USD's 200-day moving average support at 1.2730 remains possible if the sell-off in the S&P 500 persists next week. Cable has become highly correlated to the S&P 500, which dropped below its 50-day moving average.
EUR/USD returned to the middle of last week's range after ricocheting away from the lower 30-day Bolli at Thursday's 1.1737 five-week low. Euro zone countries are also dealing with rising COVID-19 cases .
The euro has been propped up to a certain extent by the ECB failing to ease policy further last week, despite deflation risk and given their own inflation forecasts show limited convergence toward their 2% target over the policy horizon.
The Fed, too, left policy unchanged on Wednesday, but the U.S. is far closer to its average inflation target than is the euro zone.
The haven yen was again in wide demand as global uncertainty levels remain high, the BOJ's stranglehold on JGB yields persists and real JGB yields rise as Japan dips back into deflation .
USD/JPY fell closer to July's 104.195 low on EBS, and a break below there would open the door to March lows . And GBP/JPY could be in for an 8% slide .
The Fed's flexible policy framework came in for different interpretations from officials , adding to the uncertainty in the markets.
Non-Asia emerging market currencies lost ground in risk-off flows, which also saw USD/CNH rebound from its recent slide.
Next week is light on major economic data until global PMIs.
(Editing by Burton Frierson Randolph Donney is a Reuters market analyst. The views expressed are his own.)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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