Daily Currency Update
USD - United States DollarThe EURUSD dropped a tenth of a percent this morning while the S&P 500 jumped nearly 1 percent at the opening bell this morning. It’s one of the rate moments since the COVID-19 pandemic that USD gained strength and equity markets have risen.Commentators have prepared for tomorrow’s Federal Open Market Committee statement. And while most believe the Fed will maintain rates for the long term, the Fed statement could still impact markets. Investor sentiment could be more risk-on, which could drive equity markets higher and demand for the Australian, Canadian and other commodity currencies up.
Key Movers
urozone factories performed better than most expected in July. Industrial output was 4.1% and the economic recovery continued throughout Europe. There are a couple of concerns. Industrial production in June was 9.5%, and the July output implied there was slow down. With increased cases of COVID-19 across Europe, and new lock down measures being put in place, the Eurozone is at a crossroad.Last night, despite mounting pressure from the European Union, Parliament backed Prime Minister Boris Johnson’s internal market bill. MP's defended the bill and said that it has necessary safeguards to protect Northern Ireland and the rest of the United Kingdom in-case Brexit negotiations break down further. Johnson has suggested that the European Union are using the withdrawal treaty agreed in January to potentially implement trade barriers between Northern Ireland and mainland Britain. It is clear to see the fractious relationship between the United Kingdom and the European Union is strained.The Australian dollar is slightly stronger this morning when valued against the greenback, just falling short of the 0.7300 level, despite the rise in Gold prices. Higher risk appetite has lent some support to the Kiwi dollar yesterday which saw selling pressure on the Aussie. While the Kiwi is up 0.6% to over 0.6700, the AUD is barely higher to start the week, seeing AUDNZD up 0.5% to about 0.9200
Expected Ranges
- EUR/USD: 1.184 - 1.19 ▲
- GBP/USD: 1.282 - 1.292 ▼
- AUD/USD: 0.727 - 0.734 ▲
- USD/CAD: 1.313 - 1.318 ▲