Investors digest slowing Chinese economy and weaker inflation in the US by buying Swiss franc and Japanese yen
The US dollar is weaker vs other safe-haven currencies this morning as FX traders digest yesterday’s lower than expected US inflation data. The British pound gained after consumer inflation data came in higher than expected bringing forward expectations of central bank rate increases. Chinese economic data disappoints as Covid outbreaks force some city-wide lockdowns. Oil pushes to a 6-week high supporting the Canadian dollar.
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September 15, 2021
EUR/USD 1.1816 GBP/USD 1.3829 USD/CAD 1.2680 AUD/USD 0.7318 USD/JPY 109.23 USD/CNH 6.4327 USD/ILS 3.2044 USD/MXN 19.9004 USD/CHF 0.9182 USD/INR 73.4925 USD/BRL 5.2703 USD/SGD 1.3410 USD/DKK 6.2928 USD/SEK 8.5814 USD/NOK 8.5935
After yesterday morning’s dollar sell-off following the lower CPI data for August, the greenback rallied and closed the day stronger. This morning the dollar is giving back those gains. Global investors see a slowing economy in China and a less urgent monetary tightening from the Fed resulting in a flight to the safe-haven Japanese yen and Swiss franc.GBP
UK inflation accelerated more than expected in August – CPI growth registered 3.2% YoY besting estimates of 2.9%. The pound strengthened on the news as FX traders see the Bank of England raising interest rates sooner.EUR
The euro is stronger relative to the US dollar after European Central Bank Executive Committee member, Isabel Schnabel, made comments during a speech that suggested investors may be over estimating the risks to the global economy and that the ECB will leave accommodative monetary policy in place until the medium-term inflation rates converge around 2%.CAD
The Canadian dollar is higher as the price of oil trades at a 6-week high. Oil production in the US has been lower since hurricane Ida three weeks ago and with hurricane Nicholas now dumping rain on much of the same area.ASIA/PACIFIC
The Chinese renminbi continues to strengthen since mid-August despite lower retail sales and weaker than expected industrial production data for August. Covid outbreaks and the Chinese authorities’ interventions in various industries has led to losses in the Shanghai stock market but renminbi remains 1% higher versus the US dollar this year.
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