The dollar continues to dominate as worries of a global recession boost haven assets. From the eurozone, a record high inflation figure adds to the common currency’s dovish sentiment. While next door in the UK, pound sterling softens on a week of disappointing press and economic data. Commodity currencies, including the New Zealand and Australian dollar, follow down markets as growth concerns materialize.
“It does not matter how slowly you go as long as you do not stop”
July 1, 2022
EUR/USD 1.0375 GBP/USD 1.198 USD/CAD 1.2965 AUD/USD 0.6773 USD/JPY 135.24 USD/CNH 6.7176 USD/ILS 3.5456 USD/MXN 20.3583 USD/CHF 0.9631 USD/INR 79.0425 USD/BRL 5.3304 USD/SGD 1.3983 USD/DKK 7.1698 USD/SEK 10.3730 USD/NOK 9.9921
The dollar remains firm overnight as yesterday’s soft US consumer spending data couples with a record high euro-area inflation print to generate deeper risk-off sentiment and safe haven demand. Traders look to this morning’s US construction spending and ISM manufacturing figures for any clues that play into the narrative of a looming global recession.GBP
Pound sterling touches its lowest level since mid-June as broad risk aversion ripples through markets. The UK released current account data Thursday suggesting continued underperformance with exacerbated foreign capital inflows.EUR
The euro slid after aggregated inflation numbers across all 19 member states hit record highs. Concerns over the ECB’s patient approach to monetary policy tightening and a major slowdown of Russian natural gas delivery add to the pending reality of euro/dollar parity.CADThe loonie suffers its largest daily drop in a week versus the dollar but was the second-best performer among G-10 peers after the Japanese yen. Preliminary data showed GDP may have contracted by 20bps MoM in May as output was reduced in oil and gas, manufacturing, and constructions sectors.ASIA/PACIFIC
Australian and New Zealand dollars slumped to their lowest levels in two years as investors turn their focus to the prospects of a global recession. However, the selloff may be overdone as central banks are expected to keep tightening with traders pricing in another 225 bps of rate hikes in Australia and 180 bps in New Zealand by year-end.
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