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USD stalling as inflation drops
Daily Currency Update
The US Dollar Index (DXY) stalled its rise from earlier this week as inflation reported for June dropped from the previous month. The Personal Consumption Expenditure (PCE) index for June, which measures changes in consumer spending on goods and services, showed prices were up 2.5% from the previous year. This was down from the 2.6% the previous month. This has driven the case for a rate cut in September up to a new high of 88%. As a result, equities that had been down over the last couple of sessions headed up, taking strength out of USD treasuries.Key Movers
The euro and GBP both made gains against the USD to end the week as US inflation increased the chance of a Federal Reserve rate cut in September and Consumer Confidence in Europe increased. A release this morning showed that confidence in France is up from 90 to 91 on the index. With France being the second biggest economy in the EU, this points to positive economic movement across the board.The Canadian dollar was up slightly as equities increased and took the wind out of the USD. The Loonie has no major data releases today, so it is likely to move in line with broader market forces. Oil traded down so far today after making gains yesterday with the West Texas Intermediate (WTI) oil price dropping back near the $78 a barrel range.
Expected Ranges
- EUR/USD: 1.0835 – 1.0949 ▲
- GBP/USD: 1.2850 – 1.2947 ▲
- AUD/USD: 0.6535 – 0.6628 ▲
- USD/CAD: 1.3800 – 1.3875 ▼
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