Daily Currency Update

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Dollar makes slight gains

USD - United States Dollar

After a week in which the US dollar reached a two-year low against the euro and a 6-month low against the Canadian dollar, the Greenback found its footing this morning and continued a third straight day of gains.

The US response to the pandemic, global trade tensions and recent announcements from the Federal Reserve all contributed to the US dollar’s softness. This week, there are few items of market news that could shift demand. Many are looking to Federal Reserve Chairman Jerome Powell’s speech at the annual Jackson Hole Economic Policy Symposium on Thursday.

There has been an element of optimism at the start of trade this week. US Food and Drug Administration approved a COVID-19 treatment over the weekend. Like other vaccine-related updates, market sentiment shifted riskier assets and benefited the Australia dollar, New Zealand dollar and Canadian dollar.

Key Movers

The Great British pound has fallen since Friday morning, despite manufacturing and services data coming in better than expected. The manufacturing and services data both came in above the expansion figure 50.0 and exceeded the forecast figures. But with warnings of an impending crises for retailers, a jobs crunch, ballooning public debt and signs that a Brexit trade deal won’t meet its end of year deadline, this was only going to weigh on the pound.

The Australian dollar has been on a nice run. It touched on a 12-month high at 0.7269 earlier in the week but has come down to open at 0.7160 this morning after sliding due to strong US PMI data. From a technical perspective, traders will watch to see if the Australian dollar can break the 0.7200 barrier again and push upwards based on the talks at the Jackson Hole Economic Policy Symposium later in the week.

Expected Ranges

EUR/USD: 1.178 - 1.184 ▲

GBP/USD: 1.306 - 1.314 ▲

AUD/USD: 0.715 - 0.720 ▲

USD/CAD: 1.314 - 1.322 ▲