Daily Currency Update
USD - United States DollarThe U.S. dollar index traded flat this morning without local news and despite U.S. stocks trading higher. Neither a risk-on market environment nor strong crude oil price action show any clear direction in the wake of a weak labor market report on Friday. However, the Greenback is trading lower in the last days. Fed officials have continued with contradictory views up until the end of last week. The Greenback was under pressure when Federal Reserve Bank Chief of St. Louis, James Bullard, called for 50 basis points cut. A more balanced view came last Friday from the Chairman of the Federal Reserve, Jay Powell, who repeated that the Fed would continue to, "…act as appropriate to sustain the expansion." However, at the other extreme, a hawkish view came from Federal Reserve Bank of Boston President Eric Rosengren who said the U.S. economy remains relatively strong.
Key Movers
China's economy is aching from the imposition of U.S. tariffs. Recent data showed exports down by 1 percent on the year in August, below the market expectation of 2 percent rise, with China's exports to the U.S. tumbling 16 percent in August. China's trade surplus fell by nearly a quarter to $ 34.8 billion from $ 45 billion in July. As shown days ago, the U.S.' trade deficit with China is contracting. The USD/CNH pair is increasing by 0.22 (weaker Chinese Yuan). In Europe, the German trade balance gave us signs of life following recent damage to the German economy, with exports adding a gain of 0.7 percent on the month in July. The EUR/USD pair advances 0.24 percent at the time of this writing. Over the weekend in the U.K., the GBP/USD has risen 0.64 percent, likely due to a modest upside surprise from July's industrial output and construction data. The Pound was also indirectly boosted by the House of Commons, which is starting to debate the possibility of a snap General Election. Amber Rudd, a senior minister, resigned from Johnson's government saying that she saw no evidence that he wanted to secure a deal with the EU before the Oct. 31st deadline. Furthermore, Boris Johnson held talks in Dublin with Irish PM Leo Varadkar as a pivotal week for the Brexit kicks off
Expected Ranges
- USD/CAD: 1.3148 - 1.3192 ▼
- EUR/USD: 1.0969 - 1.1113 ▲
- GBP/USD: 1.2274 - 1.2433 ▲
- AUD/USD: 0.6822 - 0.6873 ▲
- NZD/USD: 0.6411 - 0.6499 ▲