Home Daily Commentaries The USD is trading lower against its G10 counter parts today

The USD is trading lower against its G10 counter parts today

Daily Currency Update

The USD is trading lower against its G10 counter parts today. The focus today will be on Fed Chairman Powell’s Jackson Hole Comments at 10:00 am EST. The FOMC minutes released on Wednesday confirmed the prospect for a rate hike in September so the market will be looking to see whether the Chairman’s comments will address the Fed’s policy outlook. Overall Jackson Hole may turn out to be a low key event for the market as the BoJ Governor Abe and no senior ECB policy markets will be participating in the discussion panel tomorrow.

Key Movers

The CAD is trading relatively flat against the USD today. A renewal in market risk appetite is helping to support the Lonnie against the USD. BoC Governor Poloz is scheduled to be interviewed at 4:15 pm EST after Fed Chair Powell’s speech at 10:00 am EST. Risk is on the upside for the CAD as Poloz’s speech is expected to hold a confident tone as the recent series of data confirms the need for higher rates despite the ongoing NAFTA talks.

The EUR is also trading relatively flat today. German Q2 GDP data was in line with previous reports. The data shows domestic demand supporting overall growth which suggest a rebound in the Eurozone growth. Local Italian press reported that President Trump told Italian PM Conte that the US is willing to help Italy by buying Italian government bonds as Italy looks to refinance its debit next year.

The government has released a series of technical or advisory notes yesterday a move, which was meant to placate concerns but was met with lukewarm reception. The reminder of Brexit uncertainty is a surefire way to cause the pound to weaken.

The Sterling is finding a firmer footing heading into the North American trading session. The only economic data that released was BBA Loans for House Purchase in July, which was a disappointment printing at 39584

The Australian Dollar when valued against the worlds reserve opens stronger this morning, the gains were first led on Tuesday after the release of the RBA monthly Minutes where Governor Philip Lowe raised confidence amongst investors. He reiterated that the RBA will eventually raise interest rates if they were to see progress made on unemployment and inflation adding that any move will “likely be up not down”. The AUD/USD continued its bullish trend intraday and during yesterday’s North American session touched a high of 0.7381 as the Greenback continued to extend its downward fall following remarks from U.S. President Trump that the Fed's path of monetary policy tightening is hindering fiscal stimulus efforts to boost the economy.

From a technical perspective, if we stay above 0.7364 resistance the next level in sight is 0.74c. Support is sitting at 0.7345 and 0.7294.

The New Zealand Dollar was supported by further weakness from the US Dollar overnight as the kiwi touched US 67 cents briefly for the first time in two weeks as both the DXY and US yields were lower overnight. The NZD/USD cross looks to have bottomed out in such period of 0.6550 and becomes a key longer-term support level.

New Zealand trade balance figures surprised many by coming out much better than expected. Many forecasters had anticipated exports to shrink as a result of the ongoing trade wars but this was not the case. Indeed it may seem that a lot of exporters or importers from elsewhere have been front loading their orders before the tariffs take full effect. This is not uncommon and something we saw recently with US GDP coming out much greater than expected a few weeks ago. The net result was no change for the New Zealand dollar.

Expected Ranges

  • USD/CAD: 1.3049 - 1.3103 ▼
  • EUR/USD: 1.1535 - 1.1605 ▲
  • GBP/USD: 1.2800 - 1.2861 ▲
  • AUD/USD: 0.7238 - 0.7314 ▲
  • NZD/USD: 0.6620 - 0.6671 ▲