USD stalls on lower stock open

Key Movers

The Euro has followed along with the basket of major currencies that have lost ground to the USD this morning. The pair has remained in a range though and it’s likely to take something significant to break it out.

Like most other major currencies, the Pound has surrendered most of the gains that it made in the last 2 days. On the data front, the UK Services PMI was better than expected today, showing the confidence index reaching the benchmark of 50 on the scale.

The Yen continues to underperform the USD after the Bank of Japan interceded into currency markets last week. Data wise this morning though, confidence amongst Japanese purchasing managers came back over the all-important 50 mark. This is largely in response to the expectation that a lower Yen should lend an assist to Japanese exports. One day after Australia’s central bank disappointed with a 25-point hike, the Royal Bank of New Zealand matched expectations with a 50-point hike. This brings their overnight rate up to 3.5%.

The Canadian dollar is another currency giving up yesterday’s gains. The Canadian trade surplus unexpectedly dropped to $1.5B in August, missing the consensus of $3.45B to the good. Mostly though, this is the general strength of the USD\. With the announcement from OPEC+ today that production will be cut by up to 2 million barrels a day, there is potential for higher oil prices. This is something that could stem further weakness for the CAD.