No clarity on US fiscal package
Monday 10 August, 2020
Daily Currency UpdateUSD - United States DollarThe dollar was mixed in the first days of trading since US legislators failed to agree on a stimulus package and President Donald Trump signed executive orders attempting reboot the economy. The US Dollar Index is up .05% since yesterday’s close and is down a tenth of percent against the uero and the pound. USD/CAD is down .25%.The number of job openings increased to 5.9 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. In context, US non-farm payrolls, released last Friday, came in higher than expected. The US economy added 1.8 million jobs. EUR/USD fell on Friday after the data release.Risk-off flows tend to benefit the lower-yielding euro, especially while the US dollar is under downside pressure. However, there is still a lot of market focus on fears of a second wave of COVID-19 as another round of lockdown measures could prompt a flight to safety.
Key MoversUK jobs data could spark a reversal in the pound's recent gains should the unemployment rate in June exceed a forecast of 4.2%. The pound may come under significant pressure should the unemployment data come out worse than expected. Further concerns lie ahead when the British government's £33.8 billion furlough scheme comes to an end in October.The Royal Bank of Australia said that it expects GBP to fall 3% in 2020 followed by a likely 6% rise in 2021. Lockdowns in the country could fuel a longer economic recovery and push unemployment into next year with an unknown timeline of when a COVID-19 vaccine will be available. It is unlikely the RBA will change its current stance on the cash rate keeping it at record lows of 0.25%.The Canadian dollar climbed upward against the euro, pound and US dollar in overnight trading after the price of oil reached $42 a barrel. Saudi Aramco's Chief Executive Amin Nasser said on Sunday that he expects demand to increase in Asia as covid lockdowns ease. The Canadian dollar climbed with the price of the barrel of oil. USD/CAD was up nearly a quarter percent and EUR/CAD was up .42% this morning.
- USD/CAD: 1.333 - 1.339 ▼
- EUR/USD: 1.174 - 1.179 ▲
- GBP/USD: 1.302 - 1.309 ▼