USD pushes higher amid negative data in other regions
Daily Currency Update
The US dollar index (DXY) inched closer to 105 as US data came in higher than expected. July factory orders were released at -2.1% versus the -2.5% expected. While slightly better than expected, this movement is still not extremely significant. Weak data out of China and Australia has pushed the dollar index up today to levels not seen since March of this year. Canada’s rate decision tomorrow may send the USD/CAD pair up even higher if the Bank of Canada (BoC) holds rates steady.Key Movers
The Reserve Bank of Australia (RBA) left interest rates unchanged at 4.1%, within market expectations. There are still some forecasts for rate hikes in the future as mentioned by RBA Governor Phillip Lowe, “…some further tightening of monetary policy may be required.” The AUD is down against most major currencies currently.European Central Bank (ECB) President, Christine Lagarde’s speech kept market participants in suspense regarding next week’s rate decision with the following comment, “…actions speak louder than words.” Money markets are currently pinning odds around 25% for a quarter-point rate hike.
China’s Services Purchasing Manager’s Index (PMI) dropped to 51.8 in August from 54.1 in July, this is the lowest reading since December, when the country was under lockdown with COVID-19.
Expected Ranges
- EUR/USD: 1.07165 - 1.07983 ▼
- GBP/USD: 1.25279 - 1.26317 ▼
- AUD/USD: 0.63574 - 0.64646 ▼
- USD/CAD: 1.35863 - 1.36694 ▲