US Dollar (USD) Climbs amid Rising Bond Yields and Risk Aversion
The US Dollar (USD) marched higher during yesterday’s session, with the safe-haven ‘Greenback’ pushed up by rising US Treasury yields – which hit a 16-year high – and a risk-off market mood.
In the afternoon, the latest ISM manufacturing PMI exceeded forecasts, although it remained in contraction territory. The better-than-expected data added to USD’s gains.
Looking forward, the latest JOLTs job openings figure could dent the US Dollar this afternoon, if it indicates that the American labour market is slowing.
Pound (GBP) Mixed following Manufacturing PMI
The Pound (GBP) faced mixed movement yesterday, trading in a wide range against its peers, amid a lack of fresh impetus.
The only data release was the final manufacturing PMI, which printed broadly in line with preliminary estimates, therefore prompting little movement.
Turning to today, a continued lack of market-moving UK data could see Sterling trade without a clear trajectory once again.
Euro (EUR) Weakens on USD Correlation
The Euro (EUR) came under pressure yesterday, due to the currency’s negative correlation with a strengthening US Dollar.
The Eurozone’s jobless rate for August failed to stem EUR’s losses, despite dropping to match June’s record low of 6.4%.
This morning, hawkish comments from European Central Bank (ECB) Chief Economist Philip Lane seem to be lending EUR modest support. Lane said that upside inflation risks remain and that ‘more work needs to be done’.
Canadian Dollar (CAD) Recovers from Oil-Induced Dip
After initially declining amid a drop in oil prices, the crude-linked Canadian Dollar (CAD) then managed to recover. CAD’s positive relationship with USD lifted the currency during American trading hours.
Today, a lack of Canadian data releases could leave the ‘Loonie’ to trade in tandem with oil once again. Could a recovery in oil lift CAD exchange rates?
Australian Dollar (AUD) Falls as RBA Holds Rates
The Australian Dollar (AUD) stumbled last night after the Reserve Bank of Australia (RBA) left interest rates unchanged for the fourth consecutive month.
New Zealand Dollar (NZD) Slips amid Gloomy Business Confidence
The New Zealand Dollar (NZD) also weakened last night after business confidence improved less than forecast, with New Zealand firms still deeply pessimistic about the economic outlook.