The United States Dollar is relatively flat against most major currency sessions as a quiet session yesterday stretches into this morning.
Overview
Traders in the Asian and European sessions overnight this morning have highlighted ‘choppy price action driven by sporadic quarter-end flows,’ which is usually trader talk for flat markets, something many are welcoming after a hot start to the summer through the first half of this month. The Bloomberg Dollar Spot Index lost a touch of ground in yesterday’s session but looks set to retrace back to flat on the week today.
In the absence of major data from around the world, global focus has shifted over to equity markets – in particular, the recent plight of AI behemoth Nvidia in the US. The tech darling, after its stock skyrocketed more than 150% this year, entered correction territory yesterday on a slide of roughly 20%. Though mostly attributed to profit-taking, the loss of nearly half a trillion dollars from its market cap last week has investors jittery. The stock looks set to recover at least a small bit of ground in the premarket this morning, but the overall effect was to drag the entire S&P 500 average down by almost a percent in spite of the fact that most S&P stocks gained ground yesterday. Equities around the world seem to be on shaky footing at the moment as investors begin to wonder just how far these so-called “hot trades” can take them. Risk-off sentiment continues to run as an undercurrent to global flows, and the Dollar, still near its strongest point this year, continues to reap the benefits of a jittery global economy.
What to Watch Today…
- US Conference Board Confidence Tuesday
- Banxico Meeting Thursday
- PCE Inflation figure Friday
- Monex USA Online is always open.
EUR ⇓
The single currency continues to be plagued by political questions surrounding France’s snap election, and has lost a quarter of a percent of ground against USD this morning. While EURUSD still remains in familiar ranges, EUR has slid against GBP, notably, to its weakest level in two months. The comparison of investor sentiment between the UK and the Eurozone falls notably in favor of the UK at the moment, which is also facing its own snap election early next month. Nonetheless, the amount of French government debt that is held by foreign investors is higher than all of its G10 peers, and an uncertain snap election outcome has investors nervous about the Eurozone’s second-largest economy.
CAD ⇑
The Loonie, though still in similar ranges to trading prices over the last month, has gained a touch of ground this morning after Canadian CPI for the month of May rose more than expected, showing stalling progress back toward the Bank of Canada’s two percent target. After cutting its key interest rate by 25 basis points earlier this morning, hopes of further easing from the Bank of Canada in July have continued to diminish, and today’s release pours further cold water on rate cut expectations.
