Home Daily Commentaries The USD continues to go higher

The USD continues to go higher

Daily Currency Update

Non-farm payrolls report last Friday was a strong job growth report as expected. However, there was higher labor force participation and some moderation in wage pressures, which might slow down the Fed hike rates. Therefore, US interest rates fell over on Monday, and market participants see the Fed increasing only 75 bps later this month.

Global Equity markets and the EURUSD pair gave up gains today; both are still trading under pressure to the downside. USDJPY reached a new 24-year high today, and it hit 143.07 despite Japanese authorities saying they have a “high sense of urgency”, referring to the very weak Yen.

The US Dollar Index was trading at 110.33 at the time of writing.

Key Movers

Gazprom from Russia announced an indefinite suspension of gas flows to Europe through Nord Stream 1 pipeline. 

The pressure to the downside on EURUSD might continue as long as the worsening of the energy crisis continues to build. Euro shared currency is vulnerable to Russia’s gas supply. Even a more aggressive ECB is unlikely to help the EURUSD pair despite the high prospect of a 75bp hike this week. 

The relatively strong fundamentals of the Canadian economy against the USD and G7 have made CAD depreciation against the USD less painful today. The USDCAD could not break above 1.3160 this morning, an 8-week high. It is trading at 1.3150 at the moment of this writing.

G10 currencies and global stocks are still in a high volatility environment, so that we might see more significant swings than usual in the currency market in September.

Expected Ranges

  • EUR/USD: 0.9876 - 0.9984 ▼
  • GBP/USD: 1.1504 - 1.1604 ▼
  • AUD/USD: 0.6729 - 0.6830 ▼
  • USD/CAD: 1.3098 - 1.3168 ▲