eFXdata reports that economists at MUFG Research discuss the current market conditions amid the ongoing risk-off theme.

"The price action continues to send an ominous warning signal over the global growth outlook and indicates that market participants are becoming fearful over a more notable slowdown ahead. The price action in the foreign exchange market has been reinforced as well by position adjustment. Short US dollar positions have been cut back sharply over the past month to their lowest level in a year amongst Asset Manager/Institutional Leveraged Funds. Similarly, short yen positions had become extreme and are now being squeezed. At the opposite end of the spectrum, long Canadian dollar positions had also become extreme which continue to be challenged by recent price action."

"We favour remaining defensively positioned heading into the summer period which can be a challenging month for risk assets amidst lower market liquidity."