The USD is trading modestly lower against most of its G10 counterparts

Key Movers

The CAD is trading in a narrow range today after testing a new multi week high. Domestic data remains supportive as Tuesday’s strong GDP release continue to boost positive sentiment. Market forecast was for an increase of 0.3% and we got 0.5%. The market is now pricing in another rate hike by December.


The EUR fell throughout the day on Tuesday as the dollar strengthened across the board. Data wasn’t particularly supportive of the single currency either, being generally mixed; Spanish GDP printed at 0.6% vs. 0.7%, European CPI Flash Estimate printed at 2.1% vs. 2.0% and European Prelim Flash GDP printed at 0.3% vs. 0.4%. A host of European Manufacturing PMIs from Spain, Italy, France and Germany have just been released too, and like yesterday’s data, it was all a bit mixed, and so not particularly supportive of the euro.


GBP drifted lower throughout the day yesterday as the dollar recaptured lost ground from earlier in the week. US stocks recovered a little and US economic data was generally positive, with both Chicago PMI and CB Consumer Confidence beating market expectations. Other than that it was a fairly quiet session in London and New York on Tuesday as GBP traders sit on the sideline ahead of the much anticipated Bank of England rate announcement tomorrow. We did get some UK economic data today by way of Manufacturing PMI, which printed below expectations at 54, and it didn’t make much of an impression on the market mainly because of Super Thursday on the horizon.


The Australian Dollar opens this morning marginally higher than yesterdays’ open as commodity currencies slightly out-performed in overnight trading. Upside movements were seen after a positive reading for the building sector as new building approvals rebounded in June by 6.4% in seasonally adjusted terms. The Aussie saw initial movements to 0.7425 before oscillating between 0.7405 and 0.7435 during the release of the eagerly anticipated BOJ meeting which saw a more dovish stance than expected. Inflation forecasts were downgraded and with the decision to keep interest rates at record lows for an extended period of time, introducing forward guidance for the first time in their monetary policy report.

The Australian dollar saw overnight highs of 0.7440 before drifting lower into the North American session as United States CB consumer confidence beat expectations.



Looking forward, investors will be focused on this evenings Federal reserve meeting where it is expected rates will remain on hold and currently pricing a 80% of Federal Reverse Governor increasing interest rates in September.


NZD/USD has gone the same was as AUD/USD – south. The Trump administration is planning to propose a 25% tariff on $200bn of imported Chinese goods after initially setting them at 10%, and the headlines have hit commodity currencies including the NZD and AUD the hardest. The kiwi also suffered at the hands of the release of weaker than expected NZ employment data overnight; the unemployment rate printed at 4.5% vs. expectations for 4.4%, although Employment Change came in slightly better than market forecasts.