Dollar softens as global equity markets take a hit

Key Movers

The dollar continued to weaken through the day yesterday. Major equity indexes in the United States started the day on a weak note too and extended their losses as tech-giants continued to suffer sharp losses on disappointing earnings results. The tech-heavy Nasdaq 100 index dropped as much as 1.5% declining for a third-straight session. Netflix erased nearly 5% to lead the losses in the FAANG (Facebook, Amazon, Apple, Netflix, Google) group.

Looking ahead today on the US data front sees the release of the June Personal Consumption Expenditures (PCE) inflation report along with personal income & expenditure figures for the month of June.


The Euro rose 0.40% to 1.1705 amid broad USD weakness and a strong Swedish GDP number. Yields in the US spiked less, in relative terms, than other major currencies as the market positioned itself for end of month flows and potential monetary policy changes in Japan and UK. The underperformance of US yields weighed on the USD and the EUR/USD traded as high as 1.1719.


EUR/USD is rallying a bit this morning too, and has pushed as far as 1.1730 this morning, helped on its way by the release of better than expected French Prelim CPI. Later on this morning we get European CPI Flash Estimate, Flash GDP and unemployment.


The Australian dollar offered little to excite investors through trade on Monday maintaining a tight 30 point handle, ignoring broader equity weakness and a general risk off environment. Broader risk sentiment was weighed down by another day of heavy losses across US tech stocks and with little news flow prompting direction the AUD struggled to mount any meaningful extensions towards support or resistance. Edging upward to touch intraday highs at 0.7413 the AUD opens this morning at 0.7420 as attentions turn to key central bank commentaries.

On the local data front, Australian Building Approvals printed stronger than expected, which supported the AUD.


The CAD fell overnight following reports that American officials had taken the “highly unusual” step of rejecting Canada’s bid to take part in senior-level NAFTA talks between the U.S. and Mexico later this week. USD/CAD pushed 50+ points higher on the news.

Focus today will turn to Canadian GDP, whilst a series of US data releases may also create some more volatility in USD/CAD.


Despite the release of weaker than expected NZ data including building permits and an ANZ Business survey, which showed the activity outlook dropping to a 9 year low and business confidence at a 10 year low, the NZD has actually been fairly stable over the last 12/24 hours. Attention now turns to NZ Employment Change and the NZ Unemployment rate, both of which are released at 11:45pm BST today.