The G-10 rundown
USD – the greenback hanging in there and then some against the riskier corners of the G10 – up smartly against all three of the commodity dollars overnight. Key for the broader picture is whether the USD weakening within the G3 sticks here.
EUR – the single currency broadly firm recently, but not sure where the catalyst is for something more profound to support besides the ongoing unwinding of carry trades after recent unsettling events.
JPY – disappointing for JPY bulls here that the new lows in major yields have not yet provided better traction for the yen – but signs are that Japan’s economy is beginning to falter as well, with the June Leading Index release overnight showing another new low and lowest since 2010. Alas, USDJPY focus lower until/unless the pair rebounds back above 107.50-108.00.
GBP – sterling losing ground again and EURGBP trading up in the last shreds of the range below the post-Brexit high near 0.9300 with nary a sign of a breakthrough, and the FT reported yesterday that the EU doesn’t even want to negotiate “mini-deals” the UK has proposed to soften the impact of a No Deal.
CHF – EURCHF rebounding back above 1.0900 but needs to bounce well above 1.1000 to suggest the slide can be arrested.
AUD – the Aussie getting some relief from the recent pounding as the focus switches to the kiwi overnight and relative value traders give the AUDNZD a thought or two after the RBNZ made its mark. Still, broadly speaking downside risks on exposure to China as tensions simmer – especially now that Australia’s chief export – iron ore – is in steep retreat and suffered another bid sell-off overnight.
CAD – the RBNZ move overnight seems to have inspired CAD selling in sympathy with NZD selling as the market begins to suspect that any DM central bank with a positive policy rate will lurch into an aggressive cutting regime to join the currency war theme (2-year CAD swaps plunged some 12 basis points yesterday). USDCAD trading at last local resistance levels ahead of today’s Ivey PMI near the 200-day moving average.
NZD – RBNZ has made its mark and planted its flag at the bottom of the AUDNZD range – market will be reluctant to buy NZD, expecting a symmetric sabre rattling from the RNBZ on any kiwi strength – room higher now for AUDNZD (finally).
SEK and NOK – market doesn’t like the thinly trade currencies here, the Riksbank and Norges Bank forecasts of further policy normalization notwithstanding – watching those range extremes in EURSEK (10.85) and EURNOK (10.00+) for next steps.
Upcoming Economic Calendar Highlights (all times GMT)
- 1330 – US Fed’s Evans (Voter) to Speak
- 1400 – Canada Jul. Ivey PMI
- 2010 – New Zealand RBNZ Governor Orr at Parliament Select Committee
- 2130 – Australia RBA’s Bullock to Speak
- 2301 – UK Jul. RICS House Price Balance
- 2350 – Japan Jun. Current Account Balance