US Dollar-Slow and Steady

The US dollar started the trading week with a slow and steady rise, supported by Friday’s employment report as traders wait to hear from a slew of Fed speakers and Fed Chair Janet Yellen on Tuesday and Wednesday

Fed Chair Janet Yellen’s semi-annual testimony to Congress (formerly called Humphrey-Hawkins) is slated for Wednesday.  The testimony should not deviate much from the earlier monetary policy statement.

For today, the US dollar is likely to remain inside its overnight ranges because there isn’t any economic data releases of note.

EURUSD ticked higher in Asia and then reversed the move in Europe.  Traders are torn between the chance of another US rate hike and the risk of a quicker end to QE in Europe.

Sterling tracked the EURUSD trading patter over night, rising in Asia and falling in Europe. Weak UK data reports in recent days have diminished the prospects for a UK rate hike and weighed

USDJPY inched higher throughout the Asia session and in early European trading rising from 113.88 to 114.2 The move was supported by Friday’s US jobs report and weak Machinery Orders data (Actual 0.6% vs. forecast 7.7%, y/y)

An AUDUSD rally in Asia, from was snuffed out in European trading as US dollar buyers emerged. China CPI (Actual -0.2% vs. forecast -0.1% m/m) and PPI (Actual 5.5% vs. forecast 5.5% y/y) had no bearing on trading.  NZDUSD flat-lined in a tight band and was ignored.

USDCAD drifted higher in overnight trading but remains well -below the pre-employment data levels on Friday. Broad US dollar demand and a whiff of profit-taking ahead of Wednesday’s Bank of Canada policy decision is providing the support.

Oil prices continued to trade with a negative bias.  Friday’s report of yet another increase in the number of US drilling rigs.  The on-going supply concerns have led to talk of additional production caps from Opec.  However, that chatter hasn’t provided any support for prices.

 

FX Ranges for major currency pairs

7-Jul-17 10-Jul-17
 4PM Close 6AM Open High Low
EURUSD 1.1403 1.1383 1.1417 1.1383
USDJPY 113.89 114.21 114.29 113.88
GBPUSD 1.2885 1.2861 1.2906 1.2859
USDCHF 0.9638 0.9660 0.9660 0.9631
AUDUSD 0.7600 0.7590 0.7613 0.7588
NZDUSD 0.7276 0.7267 0.7291 0.7266
USDCAD 1.2885 1.2921 1.2919 1.2877
GOLD 1212.42 1207.32 1213.66 1205.11

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