Daily Currency Update

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Will the rise in dollar last?

USD - United States Dollar

The US dollar made incremental gains against the euro, Great British pound, Australian dollar and Canadian dollar yesterday after several days of decline. The bounce may not last long.

Today, unemployment insurance claims were higher than the previous week for only the second time since the first week of April. The Department of Labor said that 1.1 million people filed new unemployment claims last week.

Unemployment insurance claims are an early indicator of economic data and an important signal for the overall economic health of the nation. Its considered a large factor in the country’s monetary policy.

Key Movers

The euro and Great British pound also saw some movement with both being on the receiving end of some profit-taking. The Sterling fell around 1% to open this morning at 1.3109 and the Euro moved back down to 1.850.

British inflation jumped unexpectedly last month to its highest since March, as clothes shops did not hold their usual summer sales when they reopened after the coronavirus lockdown. Most economists expect it to fall again soon. Annual consumer price inflation rose to 1.0% in July from 0.6% in June. The news helped the pound hold its gains against the dollar but saw some profit taking after the FOMC minutes release.

The Australian Dollar surged to an eight-month high yesterday topping 0.7275 on the charts vs the Greenback fueled by a combination of factors including increased demand for risky assets and accelerating commodity prices especially in iron ore and gold. Unfortunately, the move was short-lived and lost all ground in the late hours of the North American session as Gold prices dropped 3%. The Westpac-Melbourne Institute Leading Index, designed to predict the direction of the economy, was released yesterday. Recent figures show the growth rate still to be in negative territory rising to -4.37 percent in July from -4.43 percent in June.

Expected Ranges

EUR/USD: 1.181 - 1.19 ▲

GBP/USD: 1.306 - 1.319 ▼

AUD/USD: 0.714 - 0.723 ▲

USD/CAD: 1.3125 - 1.323 ▼