Daily Currency Update

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Markets waiting for Fed decision

USD - United States Dollar

The US dollar edged lower against a basket of currencies after US durable goods orders missed expectations. The report showed that orders were up 0.8% month-over-month in June. Analysts had expected an increase of 2.1%. The US Dollar Index was down 0.11%, trading at 92.55 at the time of writing.

The market is waiting for the outcome of the US Federal Reserve’s two-day monetary policy meeting. The US dollar could see a boost if the central bank signaled a quicker end to monetary stimulus than anticipated. But the consensus is that’s unlikely.

Key Movers

The euro rallied against the dollar yesterday, as the pair broke back above the 1.18 handle at the end of the European session. EURUSD was up 0.10% around 1.1813 at the time of writing. Q2 GDP numbers for the Eurozone are due on Friday. Upbeat data could give the euro a boost.

The pound edged a little lower against the dollar this morning. Yesterday sterling rallied against most of its peers as COVID-19 cases in the UK dropped for a fifth day in a row. GBPUSD broke back above the 1.38 handle after a very strong day for sterling, with GBPEUR breaking the 1.17 handle briefly. GBPUSD was down 0.04%, trading around 1.3816 at the time of writing. With very little economic data from the UK over the next week, we would expect the market to be driven by Covid-19 sentiment and the Fed meeting on Wednesday.

Expected Ranges

EUR/USD: 1.772 - 1.1833 ▲

GBP/USD: 1.3767 - 1.3889 ▲

AUD/USD: 0.7339 - 0.7387 ▼

USD/CAD: 1.2539 - 1.2592 ▲