US Dollar Index falls to 13-month low
Daily Currency Update
The US Dollar Index (DXY) fell to a 13-month low after Federal Reserve Chair Jerome Powell signaled a rate reduction in the coming months. Powell didn’t provide much clarity on the speed or extent of the cuts. Markets have slightly adjusted their expectations with some leaning towards a 0.5% point cut in September, while the consensus still favors a 0.25% cut. However, US stocks surged following this speech, with the S&P 500 gaining 63.97 points. The index was within 0.6% of its all-time high set last month. The DXY traded near the 100.798 level this morning.Key Movers
The EUR/USD pair slipped from a 13-month high of 1.1201 this morning. This drop was driven by the euro's underperformance against other major currencies, fueled by increasing speculation that the European Central Bank (ECB) will once again lower interest rates during the September meeting. Markets anticipate another interest rate cut by the ECB in the final quarter of this year.The GBP/USD pair kicked off the week positively, staying close to the 1.3200 mark but failing to surpass the 29-month high of 1.3230 set last Friday. The pair traded near 1.3199 this morning, showing very little change.
The Canadian dollar significantly recovered and maintained most of its gains from Friday during a relatively calm overnight session. The USD/CAD experienced a sharp decline to fall to a 5-month low near 1.3463, triggered by comments from Federal Reserve Chair Jerome Powell. In oil news, West Texas Intermediate (WTI) crude oil traded around $77.02 per barrel this morning, an uptick of 2.93%.
Expected Ranges
- EUR/USD: 1.1150 - 1.1201 ▼
- GBP/USD: 1.3180 - 1.3222 ▼
- AUD/USD: 0.6766 - 0.6797 ▼
- USD/CAD: 1.3463 - 1.3515 ▼