The US dollar continues rallying for a second week in a row. Last week it enjoyed positive housing data, a tick up in inflation and a lack of dovish statements from the Fed.
This week and especially today, it is rising without any trigger, with substantial moves in 3 currency pairs:
1) EUR/USD breaking another level of support at 1.0850
This happens after it made an attempt to move back up.
The lack of advance in Greek talks is also taking its toll.
2) AUD/USD is slipping below 0.77
The Australian dollar did give a fight and enjoyed some kind of resilience thanks to the RBA’s lack of conviction to cut the rates again.
However, the weakness in China and especially in commodity prices is taking its toll and the pair is at its lowest in over a month.
3) USD/JPYÂ at new 8 year highs
Dollar/yen is often stuck in ranges and then makes decisive moves. The recent one comes despite strong Japanese GDP numbers.
Nevertheless, when the breaks loose, there’s no stopping it.
4) Loonie honeymoon over
Towards the rate decision in Canada, which could actually be more upbeat, the retreat of the C$ from the highs continues.
USD/CAD that already dipped below 1.20 several times, is now closer to a totally different round number: 1.25.
In our latest podcast, we discuss commodity currencies, oil hedging and preview next week’s events.
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