Greenback Ails on US Healthcare Debacle

The US dollar is ill.  Another healthcare bill failure.  Another US dollar plunge.

Asia traders were unimpressed when they learned that the Republicans were unable to secure enough votes within their own party to repeal Obamacare. Traders concluded that President Trump’s aggressive tax cut plan would meet a similar fate.  Without the stimulus from that initiative, the Fed would have no problem sitting on their hands, jeopardizing a third interest rate increase in 2017.

The US dollar sank across the board.  Only Sterling failed to rally and that was due to domestic data.

In Asia, AUDUSD jumped to 0.7904 from 0.7787. Then it got an added lift.  The RBA minutes were released and they were hawkish. AUDUSD soared, rising to 0.7941, before pausing.

NZDUSD started out wobbly. Weaker than expected inflation data drove the currency from 0.7328 down to 0.7265 instantly.  Fortunately, the US healthcare bill news popped up. The losses vanished. NZDUSD rallied to 0.7359

USDJPY opened in Asia at 112.67 and dropped to 111.99. There was a short-lived bounce in Europe but broad dollar weakness has taken its toll.

EURUSD rallied from 1.1475 to 1.1563 supported by EURGBP demand after UK data.

Sterling sold off in Asia and then rose from 1.3050 to 1.3124 in European trading.  That changed after weaker than expected inflation data and GBPUSD dropped to 1.3007.

USDCAD consolidated its recent losses. It peaked at 1.2699 in early Asia trading and then joined in the dollar-selling party.  It dropped to 1.2598 in New York trading.

There isn’t any Canadian or US data released today, leaving traders to look elsewhere for direction. Wall Street may be a source of inspiration if strong corporate earnings push stocks to new heights.    Bank of England Governor Mark Carney will be speaking soon.  Sterling traders will be all ears especially since this morning’s weak UK inflation data supports his cautious stance.

 

 

FX Ranges for major currency pairs

Close Open High Low
17-Jul-17 18-Jul-17
EURUSD 1.1482 1.1552 1.1559 1.1472
USDJPY 112.5700 112.20 1.13 111.99
GBPUSD 1.31 1.3047 1.3124 1.3017
USDCHF 0.9621 0.9548 0.9633 0.9541
AUDUSD 0.7801 0.7938 0.7941 0.7787
NZDUSD 0.7320 0.7353 0.7241 0.7218
USDCAD 1.2685 1.2616 1.2699 1.2607
GOLD 1233.95 1236.96 1238.70 1233.15
WTI 46.00 46.19 46.23 45.84

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