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Last week recap
United States Dollar
The US continues to go back and forth with China on trade tariffs. After Trump stated it would impose a 10% tariff on $200bn worth of goods on China, China has retaliated this morning with a $60bn tariff of their own on the US. This is effective September 24th. The greenback was lower overnight but seems to have found support at 94.40 (DXY) this morning. Tomorrow Building Permits and Housing Starts will release at 8:30AM EST.
USD / CAD
USD / CAD Expected Range:
The CAD overnight was lower across most of its G10 peers as the euro and pound continue to rally. The CAD did find strength against the greenback, as oil prices ticked up 2% today on news that Saudi Arabia was comfortable with Brent Oil above $80. On the NAFTA front, the US is trying to get a deal by the end of September as Freeland is set to return to Washington this week for negotiations. Manufacturing Sales m/m was a slight miss at 0.9% vs expectations of 1%.
EUR / USD
EUR / USD Expected Range:
The EUR is holding onto its recent gains as it consolidates in quiet trading. EU Council President Tusk warned on Brexit and said a catastrophe could still be avoided if all players acted responsibly. There are no domestic fundament data releases from the Eurozone today, so the EUR is expected to trade with broader USD movements.
GBP / USD
GBP / USD Expected Range:
The pound was one of the best performers of the day, rallying around 0.70% on Monday from 1.3067 to a high of 1.3164, a level not witnessed since the start of August. The main catalyst for the move was on the back of hopes that there was progress being made in the Irish border Brexit question. The Times newspaper reported yesterday that the EU was prepared to accept a frictionless Irish border post Brexit which increases the probability of a withdrawal agreement deal by the end of the year.
Looking ahead, The Prime Minister is set for another round of Brexit negotiations this week and the pound has shown various occasions in the past couple of weeks that it remains highly sensitive to Brexit headlines. There’s no UK economic data due for release.
AUD / USD
AUD / USD Expected Range:
The Australian Dollar ground its way upwards in overnight trading, moving towards and through the key 0.72 level. It traded to an overnight high of .7220 as the US/China trade headlines pushed the greenback lower. Ever since the tariffs were announced/confirmed the Aussie has fallen back, as risk demand looks a little wobbly and AUD/USD trades just shy of the .72 figure this morning.
New Zealand Dollar
NZD / USD
NZD / USD Expected Range:
The New Zealand dollar is slightly stronger this morning when valued against the U.S. Dollar. The kiwi traded at a high of 0.6607 overnight as US/China trade developments took a grip. But investors are hesitant to sell the kiwi ahead of this week’s key New Zealand data releases, including the latest quarterly Gross Domestic Product growth figures. On that note, PM Arden said overnight that she had seen the data and was “pleased” with it, only for spokesman than to say she had been mistaken and she had not seen the GDP number. NZD/USD was largely unaffected by it.
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