The dollar hovered below a two-month high versus major counterparts today, with traders largely sidelined ahead of a closely watched U.S. jobs report, which could sway the timing of an exit from Federal Reserve stimulus. The dollar index, which tracks the greenback against a basket of six major currencies, was at 91.884 early in the Asian session after retreating from as high as 92.408 on June 18, in the week the Federal Open Market Committee shocked markets by predicting two interest rate hikes by end-2023. The Fed commentary since then has put the focus on the data to determine when tapering of asset purchases and higher rates are appropriate, with Chair Jerome Powell saying a weak ago that policymakers won't act on just the "fear" of inflation, and will encourage a "broad and inclusive" job market recovery. The U.S. Labor Department is expected to report a gain of 690,000 jobs in June, compared with 559,000 in May, and an unemployment rate of 5.7% versus 5.8% in the previous month, according to a Reuters poll of economists. Investors are also looking at U.S consumer confidence data today as well as the Institute for Supply Management's manufacturing index on Thursday for clues as to where interest rates are headed. Both the dollar and yen benefited from some safe-haven demand as the more contagious Delta strain of the novel coronavirus spread in Asia and elsewhere, stoking fears of further lockdowns. The market had been positioned long of the single currency on optimism regarding the vaccine catch-up trade in the region but forecasts that the Delta variant of COVID could spread through Europe in the summer months could now be undermining confidence in this trade. Assuming the U.S. data remains broadly supportive, we expect the USD to grind moderately higher vs. the EUR through the course of the year. Sterling rose yesterday as traders brace for the end of the worst month versus the dollar since September, with the focus moving to political risks this week. Sterling was one of the worst-performing G-10 currencies last week after the Bank of England kept the size of its stimulus program unchanged.
Еuro
The single currency nudged lower yesterday, with investors awaiting direction from key economic data later in the week. Euro-dollar implied volatility gauges with a one-year maturity were close to their lowest since March 2020. Currency markets were generally quiet, with the U.S. dollar index up 0.2% on the day. Overall, the EUR/USD traded with a low of 1.1916 and a high of 1.1955 before closing the day around 1.1930 in the New York session.
Yen
The Japanese Yen benefited from some safe-haven demand as the more contagious Delta strain of the novel coronavirus spread in Asia and elsewhere, stoking fears of further lockdowns. Investors are also looking at U.S consumer confidence data today as well as the Institute for Supply Management's manufacturing index on Thursday. Overall, the USD/JPY traded with a low of 110.67 and a high of 111.09 before closing the day around 110.84 in the U.S session.
British Pound
The British Pound rose as traders brace for the end of the worst month since September, with the focus moving to political risks this week. This month, sterling dropped for the first time since April below $1.38 against a strengthening dollar after the U.S Federal Reserve surprised markets by signaling it would raise interest rates sooner than expected. Overall, the GBP/USD traded with a low of 1.3888 and a high of 1.3984 before closing the day at 1.3920 in the New York session.
Canadian Dollar
The Canadian Dollar weakened against its U.S counterpart yesterday as investors weighed rising coronavirus cases in Australia and Asia, with the currency giving back some of last week's advance. Canada's GDP report for April is due later today which could offer clues on the strength of the economy. Overall, USD/CAD traded with a low of 1.2279 and a high of 1.2338 before closing the day at 1.2321 in the New York session.
Australian Dollar
The Australian Dollar weakened today after cautious investors cut down on risk amid concerns over rising COVID-19 cases and as the greenback strengthened on growing bets of higher U.S interest rates. The Aussie fell sharply overnight after Boston Federal Reserve President Eric Rosengren raised the chances of higher interest rates to manage the rapid gains seen in the U.S. housing market. Overall, AUD/USD traded with a low of 0.7552 and a high of 0.7599 before closing the day at 0.7565 in the New York session.
Euro-Yen
EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 43 and lies above the neutral zone. In general, the pair has lost 0.04%.
Sterling-Yen
Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 44 reading and lies above the neutral zone. On the whole, the pair has lost 0.37%.
Aussie-Yen
Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 43 reading and lies above the neutral region. In general, the pair has gained 0.02%.
Euro-Sterling
This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 49 and lies below the neutral region. Overall, the pair has gained 0.34%.
Sterling-Swiss
This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 52 and lies below the neutral region. In general, the pair has lost 0.32%.
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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