Dollar gains, US Treasuries steady, equities rebound
The US dollar index gained this morning and bond markets consolidated. European equity markets rebounded after yesterday’s big sell-off despite news that testing of a promising experimental coronavirus vaccine was put on hold. US equities opened higher by over 1%. The Bank of Canada announces their interest rate decision at 10am - no change is expected. Oil and gold edged higher.
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September 9, 2020
EUR/USD 1.1818 GBP/USD 1.2989 USD/CAD 1.3199 AUD/USD 0.7272 USD/JPY 106.17 USD/CNH 6.8345 USD/ILS 3.3994 USD/MXN 21.5768 USD/CHF 0.9143 USD/INR 73.55
The dollar is higher overnight in light trading. Commodity currencies – BRL, RUB, NZD, AUD, and CAD outperformed. The UK pound underperformed on worries that post-Brexit trade talks will fail. US 10-Year Treasury yields are unchanged at 0.68%. Traders await today’s JOLTS Job Openings for July.GBP
The UK pound fell nearly 0.4% overnight as the odds of a “no-deal” Brexit increase and as the UK prepares for new coronavirus restrictions following a recent surge in cases. Traders also await publication of the controversial UK Internal Market Bill, which will describe how the UK’s four nations – England, Scotland, Wales and Northern Ireland – will trade after Brexit. There is concern about how it will apply to Northern Ireland and its border with the Republic of Ireland, an EU member.EUR
After reaching a two-year high at $1.2011 on September 1, the euro has fallen for six straight days. It’s steady as traders await tomorrow’s ECB meeting. No change in interest rates or policy is expected; however, traders anticipate some sort of follow-through from ECB Chief Economist Philip Lane’s comment when the euro rose above $1.20 that the [excessive] value of the euro “does matter” for monetary policy.CAD
The Canadian dollar gained slightly overnight as traders await the Bank of Canada policy statement at 10am. Canada’s central bank is expected to keep rates unchanged and to repeat the theme that the economy will need a great deal of support for some time to come.ASIA/PACIFIC
Asian emerging market currencies as a group weakened slightly overnight, but the Chinese yuan barely budged. US-China tensions continue to reduce risk appetite for the region.
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