Daily Currency Update

Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools.

The ECB decision this Thursday could trigger significant moves for the Greenback

USD - United States Dollar

The Greenback trades flat this morning, especially versus the Euro. The EUR/USD is falling slightly, by 0.05 percent, to 1.1038 at the time of this writing. Without critical economic data in the U.S. this morning, the news to follow comes from outside the continent. Fed Chair Jerome Powell cited weak inflation last week as one of the concerns that motivated the central bank to cut interest rates in July for the first time in more than a decade, so this week is expected to be quiet. The question for next week is whether Powell will continue with a similar narrative to the one shared at his conference in Switzerland last Friday. There he sounded less dovish than the market and Trump would like.

According to Bloomberg, the New York Fed's monthly survey showed inflation expectations for the next year dropped to the lowest since the survey was launched in 2013. American expectations for inflation over the next three years also fell, nearing an all-time low. Is this a hint of what the Fed might do next week?

Key Movers

One of the most critical movers this week is the European Central Bank, which will meet this Thursday to consider lowering its interest rate on deposits, which has stood at -0.4 percent since 2016. The U.S. dollar might be at the mercy of the decision in Europe, and Trump will likely follow through with his opinion on Twitter; get the popcorn ready!

The British Pound has continued in a rally mode since July, including after U.K. Prime Minister Boris Johnson met Irish Prime Minister Leo Varadkar in Dublin last Monday. However, Johnson's bid to force an early election on Oct 15th was rejected again in one of Parliament's last acts before the five-week shutdown. Johnson succeeded in getting Parliament closed until Oct 14th, and promised to work to make a new deal with the European Union at the Oct 17th summit in Brussels. The GBP/USD pair rises 0.12 percent to 1.2348, and the GBP/CAD pair increases 0.1 percent to 1.6285.

China's inflation has probably remained subdued enough in August to give the PBOC a free hand for further stimulus. Additionally, according to data compiled by the IMF, concerns about global trade have reached nearly ten times the peaks seen in previous decades and could shave about 0.75 percentage point off world economic growth this year.

Expected Ranges

USD/CAD: 1.3117 - 1.3164 ▼

EUR/USD: 1.1028 - 1.1054 ▲

GBP/USD: 1.2274 - 1.2379 ▲

AUD/USD: 0.6831 - 0.6892 ▲

NZD/USD: 0.6411 - 0.6499 ▼