Dollar strong versus haven currencies and the pound ahead of FOMC minutes
Kathryn Garvey " | August 21, 2019
July FOMC minutes due out this afternoon are the driving force in the market. A risk-on appetite has returned as traders square up positions ahead of their release. UK PM Boris Johnson is on his first visit to Berlin this week to kick off another round of Brexit negotiations. Strong data out of Canada drove the loonie higher.
August 21, 2019
EUR/USD 1.1098 GBP/USD 1.2131 USD/CAD 1.3258 AUD/USD 0.6796 USD/JPY 106.44 USD/CNH 7.0681 USD/ILS 3.5245 USD/MXN 19.7049 USD/CHF 0.9806 USD/INR 71.5525
USDThe dollar is steady after the dollar index reached its highest level yesterday since December. The dollar is stronger against haven currencies and the pound. July FOMC minutes will be released later today and traders will read between the lines for signs of FOMC's next moves. ECB minutes are released tomorrow and the Jackson Hole symposium on Friday will be closely watched for signals of future easing. US economic data out today includes July existing home sales.GBP
Boris Johnson is in Germany today on his first official visit as Prime Minister. Johnson and European leaders will kick off a series of meetings in an attempt to negotiate a divorce deal with the October 31 deadline fast approaching.EURThe euro held up despite news that Italian Prime Minister Giuseppe Conte resigned yesterday after clashing with his interior minister. Germany’s auction of 30-year bonds with a yield of -11 bps was met with meager demand. It showed that further interest rate cuts by the ECB will continue to provide diminishing returns in the attempt to starve off a recession.CADThe Canadian dollar was pushed higher after crude oil prices rose and Canadian CPI stayed unchanged at 2% vs 1.7% expected. The firmer than expected inflation number gives policy makers less reason for immediate interest rate cuts.ASIA/PACIFIC
Japanese and American negotiators will meet in Washington DC over the next few days in an attempt to compromise on car and beef exports. JPY trades weaker amid a mild risk-on sentiment ahead of FOMC minutes.
The Chinese yuan slipped later in Asia hours after the central bank set the daily reference rate a bit stronger than expected.