After taking its worst week since November on the chin, the United States Dollar is starting this morning in quiet trading within the ranges it set last week.
Overview
Treasuries resumed their gains this morning, putting a small bit of pressure on USD, but not tipping the scales to show an extended decline just yet. The question remains whether last week’s sell-off is the start of a sustained decline for USD into the end of the year, or if some upside remains, however temporary it may be. With the Fed’s media blackout beginning this week ahead of its meeting, and very little remaining on the data calendar, price action is likely to be choppy, but remain range-bound.
News out of China over the weekend once again is the biggest story in the macro market, as disappointing growth figures prompted many major economists to bump their year-long forecasts down. Between that and an uncertain interest rate picture out of the US, the two largest economies in the world are on shaky footing and driving risk sentiment down this morning. The US economy seems to be faring better in its attempts to engineer a soft landing, providing a contrast to most other major economies and keeping the downside for USD limited this morning
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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EUR ⇑
After recording its biggest weekly gain against USD since November, the single currency this morning is in very muted price action inside its new range, some 3% higher than last Monday morning. As there will be little coming out of the US data-wise and nothing out of the Federal Reserve before next week, movements for EUR will come out of European Central Bank speakers. Nods toward a substantial shift in policy or expectations on future rate decisions are unlikely, but any divergence from the ECB’s current tone could be noteworthy.
AUD ⇓
Australian and New Zealand Dollars are facing some weakness this morning after lower-than-expected Chinese economic growth placed pressure on the Antipodeans, both down roughly half a percent against USD. Oil prices are also down this morning, another sign of weakness for traditionally commodity-driven currencies like these two. Bulls will need to see economic stimulus or improved data out of China to see true upside potential for AUD.
