Daily Currency Update
USD - United States DollarThe US Dollar Index fell below 93 in early morning trading this morning, and the dollar is valued lower against the euro, the Great British pound, Australian dollar and Canadian dollar. The US Dollar Index measures the value of the US dollar against six world currencies and is considered an indication of the dollar’s value in international markets. It the first time in one week that the index has fallen below 93.The dollar has weakened recently after comments by the US Federal Reserve and the European Central Bank. The Fed in August a historic shift in evaluating inflation. Then on Thursday, the European Central Bank elected to maintain the current policy setting while upgrading growth and inflation forecasts. The hawkish undertone and suggestions the bank will do little in the interim to combat the euro’s appreciation helped weaken the dollar further.
Key Movers
During last week, the Great British pound dropped 5% against the dollar and 3% against the euro. The UK’s hard stance with the EU, and the government’s refusal to budge on a key few issues (including fishing rights). The odds of a no-deal Brexit seem ever increasing as each week of negotiating passes. Some institutions currently setting the odds at 50:50.The Australian dollar continued to take momentum from global risk sentiment, which bounced from risk on to risk off and then back to risk on last week. Initially the Greenback took center stage and strengthened across the board. Ultimately though, the European Central Banks commentary on Thursday supported risk assets which saw the Aussie bounce back to some degree although it struggled to break through 0.73 again. Moving into a new week, the Aussie again finds itself with a scarce economic calendar early on although there will be a busy Thursday with Australian unemployment, NZ GDP and US FOMC statement to digest.
Expected Ranges
- EUR/USD: 1.183 - 1.183 ▼
- GBP/USD: 1.277 - 1.290 ▼
- AUD/USD: 0.726 - 0.730 ▼