US Dollar (USD) Falls as Fed Expectations Slide
The US Dollar (USD) trended broadly lower during yesterday’s session as a spike in US Treasury yields was seen as further weakening the case for the Federal Reserve to raise interest rates.
However, USD’s losses were capped, as a cautious market mood ensured demand for the safe-haven currency didn’t collapse.
Coming up, this afternoon will see the publication of the latest US S&P PMIs. While not as influential as the ISM releases, they could nonetheless drag on USD exchange rates if they report the US private sector contracted this month.
Pound (GBP) Rangebound amid Data Lull
The Pound (GBP) traded in a narrow range at the start of this week’s session amid a lack of macroeconomic data to provide the currency with direction.
Sterling’s upside potential also appeared limited in light of ongoing geopolitical tensions and a cautious market mood.
Data published at the start of today’s session showed that UK unemployment held broadly steady in August. Coupled with the latest UK PMIs, which are expected to report a narrowing contraction in private sector growth, this may help to underpin the Pound today.
Euro (EUR) Flat as ECB Rate Decision Looms
The Euro (EUR) was mostly rangebound on Monday, with EUR investors seemingly reluctant to make any aggressive bets ahead of the European Central Bank’s (ECB) upcoming interest rate decision.
While the ECB isn’t expected to announce any policy changes this month, its accompanying comments could infuse some notable volatility into the single currency as the bank faces challenges in communicating its forward guidance.
Looking ahead, the Eurozone’s own PMIs are likely to act as a headwind for the Euro this morning as both the manufacturing and services indexes are expected to return negative readings.
US Dollar (USD) Falls as Fed Expectations Slide
The US Dollar (USD) trended broadly lower during yesterday’s session as a spike in US Treasury yields was seen as further weakening the case for the Federal Reserve to raise interest rates.
However, USD’s losses were capped, as a cautious market mood ensured demand for the safe-haven currency didn’t collapse.
Coming up, this afternoon will see the publication of the latest US S&P PMIs. While not as influential as the ISM releases, they could nonetheless drag on USD exchange rates if they report the US private sector contracted this month.
Canadian Dollar (CAD) Subdued as Oil Prices Wane
The Canadian Dollar (CAD) was muted on Monday as the appeal of the commodity-linked currency was undermined by a modest pullback in crude prices.
Australian Dollar (AUD) Buoyed by USD Weakness
The Australian Dollar (AUD) strengthened in overnight trade, with the ‘Aussie’ garnering support as a weaker US Dollar made the risk-sensitive currency more attractive to investors.
New Zealand Dollar (NZD) Bolstered by Risk-On Flows
The New Zealand Dollar (NZD) also firmed overnight, underpinned by the improving market mood.