The USD hedges lower, oil price higher, equities are flat while US bond yield moves up. US employment data are set to be released later this morning and remains the focus of market participants. Expectation are that the US growth slowed in June after surging the last 2 months with unemployment rate expected to retreat from a seven-month low. US Treasury secretary is in China where she’s expected to meet Premier Li. Yellen criticizes China’s punitive actions against US companies and urges market reforms.
In other news Japan Prime Minister Kishida will join NATO leaders next week to remind the alliance of the potential threat to global security caused by the Chinese and Russian activity in Asia. Saudi Arabia hikes most August oil prices to Asia after supply cuts. Russia expels 9 diplomats from new NATO member nation Finland.
In the currency markets The USD continued to slip ahead of today’s employment data. The APAC currencies are stronger with the JPY (up 0.59%), NZD (up 0.34%), AUD (up 0.29%) and CNY (up 0.20%). The Nordic currencies are mixed with the DKK and SEK losing ground against the USD (-0.10%) while the NOK gained 0.1%. The USD gained against nearly 0.5% against the MXN and 0.1% against the ZAR.
The USD/CAD pair has refreshed its three-week high at 1.3375 this morning. The Loonie asset has registered a stellar rally despite sheer weakness in the US Dollar Index (DXY), higher oil prices, and expectations of one more interest rate hike from the Bank of Canada (BoC). US and Canadian employment to be released this morning.
EURCAD managed to break through the 1.4500 area yesterday and remains near its one month high despite profit taking ahead of key economic data
EUR/USD Debate continues around the potential future moves by the Federal Reserve and European Central Bank (ECB) to normalize monetary policy, as concerns grow about slowing growth on both sides of the Atlantic. The EUR continues to struggle around the 1.0900 area. Expect market to remain quiet until the employment data release.
EUR/GBP pair shows signs of stabilization in the 0.8540s region after falling to a weekly low. Market remains sensitive to any information that could affect the expectation of a BoE tightening by 140bps by January 2024.
GBP/USD consolidates the first weekly gains in three while refreshing the intraday low near 1.2730. All eyes on US economic data.