Equities start the month higher, dollar soft
Traders are starting September in a risk-on mood, fueled by the belief that central banks will continue to provide stimulus to deal with an expanding pandemic and to support economic recovery. US equities opened up following higher Asian equities, led by China, Singapore, and Japan - each country’s index gaining over 1%, and European equities led by France’s CAC 40 index which gained 1.4%. The dollar is lower following this morning’s weak employment data and ahead of data to be released over the remainder of the week. Oil prices are soft ahead of an OPEC+ meeting today to discuss increasing output levels.
September 1, 2021
EUR/USD 1.1846 GBP/USD 1.3792 USD/CAD 1.2598 AUD/USD 0.7361 USD/JPY 109.93 USD/CNH 6.4531 USD/ILS 3.2035 USD/MXN 19.9639 USD/CHF 0.9150 USD/INR 73.0875 USD/BRL 5.1540 USD/SGD 1.3448 USD/DKK 6.2777 USD/SEK 8.6115 USD/NOK 8.6690
The dollar index is lower following an ADP Research Institute report that showed that Business Payrolls rose less than expected, indicating that companies are still struggling to fill vacant positions. The risk-on market mood led high-beta currencies – AUD, MXN, RUB - higher, and the safe-havens JPY and Swiss franc lower.GBP
The UK pound remains steady despite better-than-expected Nationwide House Price Index and Manufacturing PMI for August. Traders are starting to take into account Brexit-related political risk associated with the end of the grace period at month-end September for the Northern Ireland-UK trade check issue.EUR
The euro is little changed overnight, as traders digest EZ’s high inflation figures and yesterday’s hawkish ECB comments in light of an underlying uber-dovish monetary policy. Eurozone Manufacturing PMI for August and Unemployment for July both came in as expected. Traders are focused on more key economic data this week, including PPI, PMI and retails sales.CAD
The Canadian dollar is up slightly on the back of the risk-on market mood, which is fueling a broadly weaker dollar, and despite soft oil prices. Canada’s federal elections on September 20 may see PM Trudeau’s Liberal party challenged by the Conservative party (the party with the most votes forms the government, and its leader becomes the Prime Minister).ASIA/PACIFIC
The JPY is lower for the third day amid the risk-on mood in the markets but still hovers around the 110 level.
CNY is weaker following yesterday’s worse-than-expected China Mfg PMI data for August.
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