The United States Dollar is trading fairly steadily this morning, gaining a touch of ground against most majors, but still trading near a three-week low today.
Overview
Markets are heavily focused on meetings in Washington today between Presidents Trump and Zelenskyy. After Friday’s meeting in Alaska between Trump and Russian premier Putin ended with no agreement for a ceasefire and little material progress towards one, European leaders are converging on Washington with Zelenskyy today to see if Trump can make any progress toward peace from the other side. Russia’s precondition to a ceasefire was Ukrainian withdrawal from and relinquishment of a portion of Ukraine’s own sovereign territory, which would violate international law and was deemed a “non-starter.” Especially given the last meeting between Trump and Zelenskyy in Washington was quite contentious and ended abruptly following an Oval Office confrontation that had international leaders shaking their heads, the world is watching today’s attempt at diplomacy with baited breath.
Later this week, too, Federal Reserve officials and financial leaders converge on Jackson Hole for their annual retreat. Chair Jerome Powell is set to speak on the US’ economic outlook there on Friday – traders are primarily focused on any forward guidance on interest rates he may give, both short and longer-term. Markets are currently pricing in 85% odds of an interest rate cut in September, lower than the odds of 101% they saw last week. While ceasefire and peace talks with Ukraine still may have some impact on FX markets in the front half of the week, US traders in particular are likely to be much more sensitive to the Jackson Hole summit as a more major risk event.
What to Watch This Week…
- US Housing Starts July, Tuesday 8:30AM
- FOMC Minutes, Wednesday 2PM
- UK CPI, Wednesday
- Jackson Hole Summit Begins, Thursday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
AUD ⇑
The Australian Dollar and New Zealand Dollar are outperforming their G10 peers to trade close to flat versus USD. Risk sentiment around the world is generally positive this morning, and AUD is occupying its traditional place as a global risk barometer, keeping the Antipodean currencies afloat in early trading. Iron ore prices also have edged up today on speculation that steel demand in China could be in for a seasonal rebound, hitting a high on $103 a ton in early trading following a slump of more than 2% last week.
EUR ⇓
The single currency is underperforming this morning and has lost roughly a third of a percent against USD in Asian and European trading, though is attempting a slight comeback as the US market opens for the week. European leaders are keeping their eyes focused heavily on today’s Trump-Zelenskyy summit in Washington, after hopes for any peace agreement from the Russian side were dashed last Friday evening. US Secretary of State Marco Rubio has said that the US may have a chance to broker a lasting peace agreement without the need for an initial ceasefire, though the validity of that sentiment remains to be seen.
