Dollar mixed ahead of US holiday

Michael O’Neill

FX Trader, Loonieviews.net

Markets are noisy but not going anywhere. Wall Street opened in positive territory, but it remains to be seen if it will hold the gains ahead of tomorrow’s July 4th holiday. The US dollar can’t decide if it wants to move higher or lower. The Japanese yen strengthened slightly, and the Australian dollar weakened marginally while the rest of the G-10 majors are still hugging their New York opening levels. 

US factory orders rose 0.4% in May, well above the 0.0% forecast. Wall Street may have been impressed with the gains, but FX traders couldn’t care less.
EURUSD is adrift. Positive sentiment after Germany’s Angela Merkel resolved a political crisis is offset by rising US growth and rate hike expectations.

Oil prices have collapsed from the European peak level of $75.22/b to $73.37/b.  Saudi Arabia and Russia reaffirmed their promise to boost production by 1 million b/d to compensate for possible supply disruptions from Iran sanctions. In addition, the Trump administration has dialled back on threats to impose sanctions on all countries who import Iranian oil after November. They said they would review sanctions on a case-by-case basis.

FX and Wall Street trading will slow to a trickle in the afternoon as American’s head home to celebrate Independence Day, tomorrow.

Sterling couldn’t hang on to its post-UK construction PMI gains. Prices continue to be weighed down by lingering Brexit issues. GBPUSD is in a downtrend while prices are below 1.3180 with a break below 1.3100 extending losses to 1.3060.

Chart:GBPUSD 30-minute                                                                                                                 Source: Saxo Bank

You can access both of our platforms from a single Saxo account.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)