The US dollar opened in New York on a firm footing. The greenback scratched out added gains against the majors, except for the Swiss franc.
Sterling was lively albeit in thin markets due to a series of Assumption Day holidays throughout the Eurozone.
GBPUSD traded with a negative bias in Asia and bias proved fortuitous during the European session. New York traders were just settling in when the UK released Retail Sales, PPI and CPI. CPI was slightly worse than expected (July 2.6%, y/y vs. forecast 2.7%, Core 2.4%, y/y vs. forecast 2.5%) but unchanged from the June data. GBPUSD dropped from an overnight peak of 1.2968 to 1.2875.
On the Brexit front, the UK wants the EU to agree to keep the tariff-free trade deal with the European Union.
EURUSD was uneventful in Asia but picked up the pace in Europe, dropping from 1.1780 to 1.1721 then back to 1.1768 after a bump in Germany GDP (0.6%, q/q), although the result was expected.
Asia FX traders seemingly gave more weight to New York Fed President William Dudley’s comments, from yesterday. Mr. Dudley said that he expected balance sheet reduction to begin in September and expected one more rate hike in 2017. Those remarks and a report that North Korea has deferred the decision to attack Guam gave the US dollar a lift.
USDJPY opened with a bid at 109.62 and climbed steadily to 110.46 by the New York open.
AUDUSD rallied on the upbeat minutes from the RBA meeting. Those gains evaporated under the broad dollar strength and soft commodity prices. AUDUSD dropped from 0.7875 to 0.7826
A drop in WTI oil prices from $49.15 yesterday at mid-morning to $47.37 overnight, supported USDCAD gains. Yesterday’s news of a decline in crude imports by China triggered the oil free-fall, while broad US dollar strength has underpinned USDCAD.
FX traders have been looking for an excuse to buy US dollars. The dialing-back of hostile rhetoric between NK/US and the Fed’s Dudley have given them a couple. This morning’s US data could give them more. Export/Import Prices, Business Inventories, NAHB Housing Market Index and Retail Sales will boost the greenback if they surprise to the upside, especially with a robust Retail Sales report. (Retail Sales forecast 0.4%)
|15-Aug-17||Open-6 am EDT||High||Low|
USDCAD Technical outlook:
The intraday USDCAD technicals are bullish while prices are above 1.2700. A break of the strong resistance in the 1.2750-70 area will extend gains to 1.2865 and then 1.2980. A move below 1.2670 would negate the upward bias and argue for some 1.2620-1.2750 consolidation. For today, USDCAD support is at 1.2705 and 1.2680. Resistance is at 1.7550 and 1.2770
Today’s Range 1.2715-70
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