Currency Market Analysis

Aug 02, 2017 | Currency Market Analysis

Global Themes

US stages comeback on better data, commodity fall

The US dollar was stronger overnight a series of better economic released boosted sentiment toward the US economy.

The USD was also helped by falling commodities. Markets saw a pullback after a very strong run for both iron ore and crude oil. Iron ore was down about 3% and crude down about 4%.

Iron ore and oil are both up around 20% since early June. The US dollar will often move inversely to commodity prices.

Aussie weakens

The USDSGD climbed 0.3% as it rebounded from 10-month lows.

The euro eased from recent highs despite another good reading from European growth.

The Japanese yen was higher as it climbed to the strongest level since 0.2%.

The Australian dollar was weaker overnight as overseas markets reacted to yesterday’s Reserve Bank of Australia statement. A fall in commodities also hit the currency.

Yesterday’s statement saw the RBA cautiously warn that a higher Australian dollar could hurt the local economy.

Kiwi grounded

Today, NZ employment is the big story.

A big drop in employment – quarterly employment fell by 0.2% versus the 0.5% growth markets expected – saw the NZD weaker.

Looking forward, Australia has building approvals at 9.30am while the US ADP jobs at 8.15pm are seen as important ahead of Friday’s non-farm payrolls.

Locally, manufacturing activity numbers – measured by the purchasing managers index – will be due at 9.00pm.

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