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    Oil drop hits loonie and peso – FX Volatility returns

    Volatility returned to the currency markets last week with the Australian and New Zealand Dollar falling the hardest against the Greenback (both down 1W -3.0%).

    Updated: Sep 08, 2021  

    The Canadian dollar (1W -2.3%) dropped to it’s lowest this year after WTI oil sunk below the $62 level which putting pressure on oil-related currencies such as the loonie and Mexican peso (60 DAY LOWS).

    New Zealand’s central bank, the RBNZ surprised markets when they kept interest rates unchanged after analysts had expected a 0.25% hike. A single domestic case of Covid seems to have stayed the RBNZ’s hand while Australia continued to grapple with Covid-19 lockdown misery after the country reported its highest single-day rise in cases.

    This week’s big event is the annual Jackson Hole, Wyoming meeting of central bankers where economic policies will be discussed, this year a virtual ranch get-together!

    The Dollar Index (USD/X), a favourite gauge of the Greenback’s value against a basket of 6 major currencies ended the week higher, at 93.45 from 92.53.

    It was all about when the US Federal Reserve would announce a formal taper of its emergency stimulus. Ongoing concerns about economic growth amidst rising coronavirus cases of the Delta variant provided the US Dollar with additional haven support.

    The US 10-year bond yield settled little changed at 1.26% on Friday, from 1.28% a week ago.


    Most Active Currencies


    Rate Trends Last Week

    EUR/USD – The Euro lost ground against the US Dollar settling at 1.1700 at the close of New York on Friday. Last week the EUR/USD pair was changing hands at 1.1795. Weekly low traded for the shared currency was at 1.1664 which was hit on Friday. The EUR/USD pair hit a peak at 1.1805 which was last Friday’s overnight high.

    AUD/USD – The Australian Dollar tumbled to settled at 0.7135 in New York on Friday. A week ago, the Aussie Battler was trading at 0.7370. Weekly high traded for the Aussie was at 0.7381 recorded last Friday. The Aussie hit its low for the week at 0.7106, which seen overnight on Friday.

    NZD/USD – New Zealand’s central bank, the Reserve Bank of New Zealand surprised markets by maintaining the Official Cash Rate at 0.25% at its meeting earlier this week. Analysts had expected to cash rate to be raised to 0.5%. Weekly low for the NZD/USD was at 0.6805, traded on Friday. The NZD/USD hit a weekly high at 0.7048 last Friday. The Kiwi closed at 0.6835 (0.7040 last week).

    GBP/USD – Sterling closed the week at 1.3622, down from its finish last week at 1.3865. Broad-based US Dollar strength weighed on the British Pound. Economic data released on Friday saw UK Retail Sales slump -2.5% in July from +0.5% in June. Weekly low traded was 1.3597 (Friday) while the weekly high was 1.3878, which was hit earlier in the week on Tuesday.

    USD/JPY – The Dollar Yen pair finished the week marginally higher at 109.77 from 109.60 last week. The Greenback hit a weekly high at 110.23 on Thursday. The weekly low traded for USD/JPY was at 109.11 which was seen on Tuesday.

    USD/CAD – Against the Canadian Loonie, also considered a resource currency by FX traders, the Greenback soared to 1.2823 from last week’s 1.2516 close. Canada’s major commodity export is Crude Oil. Brent Crude Oil prices plunged over the week to finish on Friday at USD 65.00/barrel from USD 70.25/barrel last Friday. USD/CAD hit a low for the week at 1.2506 last Friday. Weekly high traded for the USD/CAD pair was at 1.2949 which was Friday’s peak.

    USD/SGD – The US Dollar gained against the Singapore Dollar and other Asian and Emerging Market currencies. USD/SGD closed at 1.3620 on Friday from 1.3546 a week ago. The weekly high traded for the USD/SGD pair was at 1.3655 on Thursday. Weekly low was at 1.3525, traded on Tuesday.

    USD/THB – the Greenback finished the week little changed against the Thai Baht. On Friday, the USD/THB pair was last at 33.37. A week ago, the US Dollar recorded a close at 33.35 Thai Baht. The weekly high for the USD/THB was at 33.46 which was recorded both on Tuesday and Wednesday. Weekly low was seen on Thursday, which was 33.12.

    USD/INR – Against the Indian Rupee, the US Dollar finished the week higher at 74.35 from 74.25 last Friday. Weekly high traded for the USD/INR pair was at 74.48 on Friday. The low for the Greenback was at 74.11 Indian Rupees which was recorded on Tuesday.

    USD/PHP – The Dollar settled at 50.45 Philippine Pesos on Friday at the close of trade. A week ago, the USD/PHP pair settled at 50.65. The USD/PHP pair was one of the few currency pairs where the Greenback finished lower. Weekly low for USD/PHP was at 50.34 hit on Thursday. The high for the week was at 51.12, recorded on Tuesday.

    EUR/JPY – The Euro finished at 128.45 Yen. Last Friday, the EUR/JPY pair settled at 129.30. Weekly low traded was at 127.93 which was seen on Thursday. The EUR/JPY pair traded to a weekly high at 129.70 which was last Friday’s overnight peak.

    EUR/GBP – Against the British Pound, the Euro settled at 0.8588 on Friday, up from last Friday’s close at 0.8505. The weekly low traded for the EUR/GBP pair was at 0.8484 which was traded on Tuesday. EUR/GBP hit its weekly high at 0.8590 on Friday following the slump in UK Retail Sales.

    EUR/AUD – The Euro settled to finish at 1.6380 Australian Dollars in New York on Friday. A week ago, the EUR/AUD pair was at 1.6000. The Aussie Battler fell harder against the Greenback than the Euro did. Australia’s struggle to contain the spread of the Delta variant continued to weigh on the Aussie. EUR/AUD high was at 1.6436 (Friday) while weekly low traded was at 1.5967, hit last Friday.

    GBP/JPY – Against the Japanese Yen, the British Pound was last at 149.57 on Friday from 152.00 a week ago. Weekly low traded for the GBP/JPY pair was at 149.18 which was seen on Friday night. The high for the British Pound was at 152.55 which was last Friday’s peak.

    GBP/AUD – The British Pound finished at 1.9082 Australian Dollars on Friday at the New York close. A week ago, the GBP/AUD pair settled at 1.8815. Weekly high traded for this cross-currency pair was at 1.9154 which was Friday’s peak. Weekly low was at 1.8716 which was seen on Tuesday.

    AUD/CAD – Against the Canadian Dollar, the Aussie Dollar settled at 0.9152 on Friday from 0.9227 a week ago. The Aussie hit its low for the week against the Canadian Loonie at 0.9143 on Friday. Weekly high traded for the AUD/CAD pair was at 0.9239 which was hit last Friday.

    AUD/NZD – The AUD/NZD cross had a relatively subdued trading week. Australia’s number of coronavirus cases of the Delta variant continued to soar. Yesterday, New South Wales, the country’s largest State hit a record 830 cases in a single day. There was hope though with NSW now one of the highest, if not the highest in the world for vaccination rates. AUD/NZD closed at 1.0442 from 1.0470 last week. The weekly high traded was 1.0544, seen on Wednesday. Weekly low was 1.0409 which was recorded on Friday.


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