The Japanese yen continues to flex its muscles, as USD/JPY has dropped for a fifth successive day. On Friday, the pair is trading at 104.43, down 0.29% on the day. USD/JPY is down 1.65% this week and touched a 7-week low earlier in the day. It has been an eventful week in Japan. Yoshihide Suga became the new prime minister, replacing Shinzo Abe, who resigned due to poor health. This marked the first leadership change in Japan in eight years, but the transition was a smooth one and the Japanese yen didn’t miss a beat, as it continued to head higher. BoJ will maintain easing The Bank of Japan held its policy meeting on Thursday, and the message was more of the same from the … [Read More...]
USD/CAD yawns as retail sales slides
This week has been a quiet one for the Canadian dollar, as the USD/CAD trades close to the 1.32 level. On Friday, USD/CAD is trading at 1.3186, up 0.16% on the day. Canadian retail sales drop off sharply Earlier in the week, US retail sales in August slowed significantly, and it was Canada’s turn on Friday, as the July data was released. Headline retail sales dropped to 0.6%, down sharply from 23.7% beforehand. The core reading was even weaker, with a decline of 0.4%, down from 15.7% a month earlier. Despite the softness in the retail sales numbers, investors were in a forgiving mood and did not punish the Canadian dollar. The Canadian economy appears headed in a V-shaped recovery and the Canadian currency has … [Read More...]
USD/CAD steady as US job numbers sparkle
USD/CAD is steady on Friday, shortly after key job releases on both sides of the border. Early in the North American session, the pair is trading at 1.3093, down 0.25% on the day. The focus is on job numbers, as both Canada and the US have just released key employment data for August. The most important of these readings, US Nonfarm Employment Change, came in at 1.371 million, very close to the forecast of 1.375 million. This was certainly a relief, as the ADP Nonfarm Payroll report came in at 428 thousand, well short of the estimate of 1.25 million. The US unemployment rate sparkled, dropping to 8.4%, down from 10.2% beforehand and well below the estimate of 9.8%. This marks the first unemployment rate in single digits since the March … [Read More...]
AUD/USD edges up despite Capex decline
The Australian dollar is in green territory for a third successive day. In Wednesday’s North American session, AUD/USD is trading at 0.7250, up 0.22% on the day. Today’s key release was second-estimate US GDP, which decreased at an annual rate of 31.7% in the second quarter. This was upwardly revised from the initial release of 32.9%. Aussie shrugs as Private Capital Expenditure slides Another day, another soft reading in Australia. New Private Capital Expenditure declined 5.9% in the second quarter, marking a sixth straight quarterly decline. Spending on manufacturing fell by 4.5%, while services slid by 8.4 percent. Although this figure beat the forecast of -8.2%, this still was the sharpest decline in Capex since 2015. The Q2 decline reflects the devastating effect on the economy … [Read More...]
USD/CAD dips to 7-month low
The Canadian dollar has posted small gains for a third straight day. In Thursday’s North American session, USD/CAD is trading at 1.3131, down 0.11% on the day. US GDP, jobless claims draws a yawn from USD/CAD In the US, GDP plunged by over 30% in the second quarter, but the sharp drop was expected, so investors and traders didn’t bat an eyelid. The second-estimate release showed the economy declined at an annual rate of 31.7%, which was a bit better than the initial estimate of 32.9% back in July. Still, the figure reflects the severe economic downturn caused by the Covid-19 virus, particularly the lockdowns in April and May which brought much of the US economy to a grinding halt. Unemployment claims were … [Read More...]
EUR/USD gains ground on German GDP
The euro has pushed above the 1.18 level on Tuesday. Currently, EUR/USD is trading at 1.1812, up 0.21% on the day. EUR/USD received a boost from German Final GDP, which was stronger than expected. German GDP revised upwards German GDP nose-dived in the second quarter. The initial estimate in July showed that the eurozone locomotive sustained a double-digit drop, with a decline of 10.1%. However, there was some good news on Tuesday, as the decline was not quite as steep as expected. The final GDP reading was revised upwards, to -9.7%. Still, this marked the sharpest decline in quarterly GDP since records were first kept in 1970. The Covid-19 pandemic has caused severe economic damage in the eurozone, and Germany has not been immune. In particular, … [Read More...]
USD/CAD dips on mixed US data
The Canadian dollar has posted slight gains in Tuesday trade. Early in the North American session, USD/CAD is trading at 1.3186, down 0.23% on the day. US consumer confidence slides The US consumer held on tighter to the purse strings in July. The Conference Board Consumer Confidence indicator fell for a second straight month, falling to 84.8. This was down from 91.7 a month earlier and missed the estimate of 93.0. There was some positive news as well. The Richmond Manufacturing Index accelerated for a fifth successive month, rising from 10 to 18. In the construction sector, New Home Sales soared to 901 thousand, up sharply from 776 thousand beforehand. In Canada, Corporate Profits declined by 8.0% in Q2, a definite improvement from the plunge of -38.4% in the first quarter. The Canadian economy … [Read More...]
NZD/USD calm despite plunge in retail sales
The New Zealand dollar has started the week quietly. NZD/USD is currently trading at 0.6536, up 0.04% on the day. NZ retail sales suffer double-digit drop New Zealand retail sales are published each quarter, magnifying the impact of each release. Retail sales declined by 14.6% in the second quarter, much worse than the reading of -0.7% in the previous quarter. Core retail sales weren’t much better, with a decline of 13.7%, the first decline since 2013. The double-digit losses were reflective of the severe economic conditions due to the Corvid-19 pandemic. However, both releases beat their estimates, so the soft numbers didn’t pull down the New Zealand dollar. Earlier in August, the Governor of the Reserve Bank, Adrian Orr, announced that the Monetary Policy … [Read More...]
AUD/USD at six-month high on RBA optimism
The Australian dollar is showing little movement in Friday trade. AUD/USD is currently trading at 0.7185, down 0.10% on the day. Slowly but surely, the Australian dollar continues to creep higher against the US dollar. The Aussie last registered a losing week in mid-June and has gained close to 5.0% during this period. AUD/USD touched a high of 0.7275 earlier this week, its highest level since February. What is perhaps most impressive of the Aussie rally is that investors have given the currency a thumbs-up, despite the severe global economic conditions. Traditionally, safe-haven assets such as the US dollar move higher in times of crisis, at the expense of risk currencies such as the Australian dollar. This has not been the case, however, during … [Read More...]
GBP/USD retreats as volatility continues
It has been an unusually busy week for the pound, as GBP/USD has been showing significant volatility for most of the week. Currently, GBP/USD is trading at 1.3162, down 0.40% on the day. Retail sales, PMIs head higher On Friday, there was good news across economic sectors. Retail sales posted its third successive gain, with a reading of 3.6%. This beat the estimate of 2.0%. The Services PMI showed a strong increase in business activity in July. as the index climbed to 60.1, up from 56.5 in June. This points to strong expansion. The Manufacturing PMI improved to 55.3, up from 54.0 beforehand. These solid numbers have raised hopes that the economic recovery is finding its feet. British inflation levels moved higher in July. Consumer inflation climbed to 1.0%, up … [Read More...]
Crude oil yawns after OPEC meeting
OPEC members and Russia (OPEC+) held a ministerial meeting on Wednesday. The virtual meeting was held to monitor the group’s oil supply reduction agreement and report on whether members were in compliance with production limits. OPEC has been cutting production since May, in response to the sharp drop in global demand for oil in the wake of Covid-19. This move is an effort by OPEC to stabilize the price of oil, which nose-dived 48% in March and came close to USD11.00 a barrel in April. Oil prices have since recovered, with Brent oil trading just below USD 45.00. In contrast to these sharp fluctuations several months ago, oil prices have been relatively steady since the end of June. The ministerial meeting, which was little more than … [Read More...]
USD/CAD – Canada retail sales eyed
The Canadian dollar is down slightly on Thursday. Currently, USD/CAD is trading at 1.3205, down 0.11% on the day. Federal Reserve minutes boost US dollar The Fed minutes were downbeat about economic conditions. Members stated concern about Covid-19’s continuing adverse impact on the US economy. As well, members dampened any expectations about using bond purchases to control yields on government bonds. This resulted in yields dipping lower while the dollar showed gains after the minutes were released. The minutes also reiterated a call from Fed Chair Jerome Powell on the need for a stimulus fiscal package to boost the struggling economy. A fiscal package remains stalled in Congress, however, and it’s unclear when there will be a vote in Congress. On Friday, Canada releases … [Read More...]
GBP/USD jumps over 1%, Brexit talks resume
Pound Jumps as US 10-year yield drops On Wednesday, the pair is trading at 1.3202, down 0.27% on the day. The British pound roared on Tuesday, as the US dollar was the pound’s punching bag for the day. GBP/USD jumped 1.02%, its strongest one-day gain since June 1st. The pair touched a high of 1.3267, a level not seen since December 2019. There was no significant data out of the US or the UK on Tuesday, and GBP/USD gained ground as the 10-year US yield fell for a third successive day. As well, the logjam in Washington, DC over the fiscal stimulus package has dampened sentiment for the US dollar. Brexit talks continue The British government has said that it can reach a trade deal with … [Read More...]
AUD/USD resumes rally on consumer confidence
Aussie back to winning ways The Australian dollar is in positive territory on Tuesday. AUD/USD is currently trading at 0.7236, up 0.30% on the day. After a listless week, AUD/USD has flexed some muscle and has gained close to 1.0% since the weekend. The Aussie has not sustained a losing week since mid-June, having gained 4.6% during this time. Despite its status as a risk currency, investors have shown a willingness to forego the safety of the US dollar during the Covid-19 crisis in favor of the Australian dollar. AUD/USD received a boost on Tuesday, as the ANZ-Roy Morgan Consumer Sentiment Index came in at 88.6, up from 85.5 beforehand. This was the first time that the index has shown a gain since mid-June. … [Read More...]
USD/CAD – Canadian dollar gains continue
The Canadian dollar enjoyed a sixth straight winning week, with gains of close to 1.0%. The currency is in positive territory at the start of the week. Currently, USD/CAD is trading at 1.3208, down 0.44% on the day. Manufacturing sales shines The week ended on a positive note for Canadian fundamentals, as Manufacturing Sales climbed 20.7% in June, above the estimate of 16.4%. This follows a gain of 10.7% beforehand and is a further sign that the recovery is taking hold in Canada. On Monday, Foreign Securities Purchases declined by C$13.5 billion in June, well off the estimate of a gain of C$20.0 billion. Ahead – OPEC meeting, Fed minutes With no Tier-1 data out of the US or Canada until Wednesday, we could see range-trading … [Read More...]
EUR/USD yawns as GDP slides
It has been a quiet week for EUR/USD and the pair shrugged off a double-digit decline in Eurozone GDP on Friday. Currently, EUR/USD is trading at 1.1806, down 0.06% on the day. Eurozone economy savaged by Covid-19 There was grim news on the economic front on Friday, as Eurozone GDP plunged 12.1% in the second quarter, its worst quarterly decline on record. The sharp decline reflected the strict lockdown measures across much of Europe, which brought large swathes of the economy to a standstill. This second estimate confirmed the initial release, so the market reaction was muted. Still, it’s clear that the eurozone remains in deep economic trouble, and further soft economic numbers could put downward pressure on EUR/USD, which has looked strong … [Read More...]
USD/CAD tests 1.32 as loonie presses higher
The Canadian dollar has posted gains every day this week, as the pair continues to make steady inroads against the US dollar. USD/CAD is currently trading at 1.3203, down 0.33% on the day. In the North American session, the pair touched a low of 1.3192, its lowest level since January. Low oil inventories boost the Canadian dollar As the US and other economies show signs of recovery from the Covid-19 pandemic, demand for oil has increased. This has resulted in declines in US oil stockpiles for three straight months. On Wednesday, Crude Inventories declined by 4.5 million barrels. Higher demand has put upward pressure on oil prices, with WTI Crude rising 5.4% so far in August. WTI prices have almost fully recovered from the staggering losses in March of 55.6… [Read More...]
AUD/USD – Markets eye employment data, RBA’s Lowe
The Australian dollar has been on a red-hot streak since April, racking up gains of 15.4% in that time. However, the plucky Aussie has taken a pause and is unchanged in the month of August. Is this hiatus a temporary blip, or has the Australian dollar finally run out of steam? Aussie fundamentals started the week on a sour note, as NAB Business Confidence fell to -14 in July, down from +1 beforehand. The indicator has eked out only one gain since November, as the business sector is clearly pessimistic about economic conditions. On Thursday, we’ll get a look at key employment numbers. The economy is projected to create 30.0 thousand jobs, which would be a huge drop from the previous release of 210.8 thousand. The unemployment rate … [Read More...]
USD/CAD mini-rally continues
The Canadian dollar continues to make inroads against its US cousin. USD/CAD is trading at 1.3251, down 0.36% on the day. It has been a good week for the Canadian dollar so far, as USD/CAD is down 0.98%. Is Canada’s economy on an upswing? There are signs that the Canadian economy is gaining some steam, after the economy was hit hard by the Covid-19 pandemic. There was impressive employment data at the end of last week. In July, the economy created 418.5 thousand jobs, above the estimate of 395.0 thousand. The unemployment rate fell sharply to 10.9%, down from 12.3% beforehand. On Tuesday, Housing Starts jumped to 246 thousand, up from 212 thousand in the previous release. This figure easily beat the forecast of 208 thousand. The Canadian dollar received … [Read More...]
Gold breezes past USD2000 -what’s next?
Up, up and away! Gold is poised to have a fifth consecutive winning week. It has been all smiles for the yellow metal, which has surged in the wake of the Covid-19 pandemic. Since April 1, gold has shot up some 27.3 percent, including a jump of 10.9% in July alone. This upward trend is not all that surprising, given that gold is traditionally a safe-haven asset, which attracts nervous investors in times of crisis. And what bigger crisis than a global pandemic? At the same time, the fact that gold has punched past the symbolic USD2000 level (for the first time ever) and continues to hit new records is an impressive feat and raised investor sentiment towards gold. Gold touched a record high of USD2075 earlier on … [Read More...]
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