Home Daily Commentaries The Greenback is headed for its best week in two months

The Greenback is headed for its best week in two months

Daily Currency Update

USD - United States DollarThe U.S. dollar index increases 0.1 percent this morning ahead to next week's Fed rate decision. The Greenback is headed for its best week in two months, and it is testing a one month high at 97.98 when the highest level in 2018 and 2019 was only 98.37. On the release side, according to the Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2019, when the expected number was 1.8 percent. In the first quarter, real GDP increased 3.1 percent. The increase in real GDP in the second quarter reflected positive contributions from Personal Consumption Expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, non-residential fixed investment, and residential fixed investment.

Key Movers

According to Bloomberg, the IMF's European board members met to discuss the institution's future leadership as Christine Lagarde prepares to take charge at the ECB. At the same time, the ECB's Governing Council signed off on the appointment of Christine Lagarde as president of the ECB, but not all of the 21 voting members backed her. Either way, Draghi's a fan and he added, "…she'll be an outstanding president of the ECB." Mario Draghi, the current ECB head, said that he did not see the Euro area entering a recession, despite the recent under-performance of Germany. Simultaneously, German Finance Minister Olaf Scholz brushed off warning signals; he said, "We are not in a situation that makes it necessary or wise to act as if we were in a crisis, we are not." He added instead that resolving, "…man-made" crises such as trade tensions and a potentially hard Brexit would help boost growth as early as the end of this year.” The EUR/USD pair trades at 1.1132, representing a 0.13 percent decrease. In the U.K., according to Bloomberg, it seems that Johnson will encounter the same difficulties as May did in trying to get the U.K. out of the E.U., when Commission President Jean-Claude Juncker rejected Boris Johnson's demands for a better Brexit deal, saying the Withdrawal Agreement is the best and only one possible. The GBP/USD pair trades at 1.2417, reflecting a 0.24 percent fall. Finally, the Aussie versus the U.S. dollar falls for the sixth day, trading at 0.6921, a 16 days low, as traders build bets the central bank will keep cutting interest rates following dovish comments this week from Governor Phillip Lowe.

Expected Ranges

  • USD/CAD: 1.3150 - 1.3219 ▲
  • EUR/USD: 1.1101 - 1.1138 ▼
  • GBP/USD: 1.2382 - 1.2442 ▼
  • AUD/USD: 0.6900 - 0.6952 ▼
  • NZD/USD: 0.6602 - 0.6645 ▼