Daily Currency Update

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The Greenback increases due to positive economic data and weakness in other developed economies

USD - United States Dollar

The U.S. dollar index is rising 0.12 percent this morning following the strongest retail sales surge in four months, pushed by an increase in online purchases, giving a break to the gloomy global economic growth picture. The expected increase was 0.3 percent, but it came in at a 0.7 percent increase. At the same time, according to the August Manufacturing Business Outlook Survey, the manufacturing activity in the region continued to grow. The survey's broad indicators remained positive, although their movements were mixed this month: The general activity, shipments, and employment indicators decreased from their readings last month, but the indicator for new orders increased. The survey's future activity indexes remained favorable, suggesting continued optimism about growth for the next six months. The Philadelphia Fed Business Outlook index (in August) for current general activity fell 5 points this month to 16.8, after increasing 22 points in July, but the expected number was 9.5, so the index came in much better than expected.

Key Movers

According to Bloomberg, in the bond market in the U.S., the 2-year and 10-year treasury yield curve inverted, signaling that a recession is on the way, following signs of slowing in China and Germany. Investors fleeing riskier assets also pushed the 30-year yield to a record low. Germany is the largest economy in Europe and the growth engine of the euro-zone economy, but it was not only the economy that suffered from sluggish economic data. The British economy also shrank in the second quarter, as occurred in Sweden. On the other side, China, the world's No. 1 trading nation, has also shown signs of weakness. The EUR/USD pair falls 0.21 percent this morning to a critical support level 1.1110.

Expected Ranges

USD/CAD: 1.3283 - 1.3365 ▲

EUR/USD: 1.1089 - 1.1162 ▼

GBP/USD: 1.2056 - 1.2150 ▲

AUD/USD: 0.6745 - 0.6800 ▲

NZD/USD: 0.6405 - 0.6508 ▲