The U.S. dollar is weaker this morning as the global risk tone strengthened, diminishing demand for the greenback.
Overview
The Bloomberg Dollar Spot Index is down 0.2%. The dollar’s decline correlates to action taken by the People’s Bank of China’s action to bolster their economy. The Chinese central bank cut its reserve requirement ratio, instantly sending Asian stocks into a rally.
The economic docket is light today with only U.S. May wholesale inventories out at 10 a.m. We will keep an eye on developments in Venice, Italy today. G-20 finance ministers and central bankers are expected to back an international corporate tax minimum which would be a diplomatic win for President Joe Biden and Treasury Secretary Janet Yellen.
What to Watch Today…
- No major economic events scheduled for today
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CAD ⇑
The Canadian dollar was up modestly overnight but is extending its gains in early trading following strong employment data. The Canadian economy added 231K jobs in June, beating estimates of a 175K jobs and considerably higher than the 68K contraction in the month prior. The unemployment rate still elevated at 7.8%.
Commodity-linked currencies are generally up this morning, rising with the price of oil.
GBP ⇑
The British pound is in rally mode versus the U.S. dollar despite disappointing data released in the U.K. Month over month gross domestic product grew 0.8% in May, failing to meet expectation of 1.5% growth. April’s print was also downwardly revised.
The Sterling’s bounce overnight is essentially a recovery from yesterday’s losses. Overall, the sterling is still headed for its second weekly loss versus its American counterpart.
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