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Forex Today: Focus is on BoC policy decision and US data.

This is what you need to know to trade today wednesday september 6:

The DXY Dollar Index fell back early Wednesday after hitting its highest level since March near 105.00 on rising Treasury yields. The markets are waiting for the Bank of Canada (BoC) policy announcement and ISM services PMI report for August from the US. The European economic agenda will include retail sales data for July and the Federal Reserve will publish its beige book during the American session.

Following a three-day weekend in the US, the 10-year US Treasury yield topped 4.2% on Tuesday, helping the US dollar (USD) outperform its rivals. The bearish opening on Wall Street also contributed to the dollar continuing to gain strength. With the major US equity indices rebounding later in the session, the DXY index lost its momentum and entered a consolidation phase in the Asian session. Meanwhile, the Shanghai Composite and Hang Seng indices rallied on Wednesday after two days of declines.

Current price of the US dollar

The following table shows the percentage change of the US Dollar (USD) against the major currencies.

USD -0.06% 0.02% 0.03% -0.24% -0.14% -0.20% -0.07%
USD 0.08% 0.10% 0.09% -0.18% -0.07% -0.13% 0.00%
GBP -0.03% -0.09% 0.00% -0.27% -0.16% -0.22% -0.09%
CAD -0.03% -0.08% 0.01% -0.26% -0.16% -0.22% -0.09%
AUD 0.25% 0.17% 0.28% 0.27% 0.09% 0.04% 0.17%
JPY 0.16% 0.06% 0.15% 0.13% -0.14% -0.05% 0.06%
USD 0.19% 0.13% 0.22% 0.22% -0.04% 0.07% 0.13%
CHF 0.07% 0.00% 0.09% 0.08% -0.19% -0.06% -0.14%

The heat map shows the percentage changes of major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the Euro in the left column and move across the horizontal line to the Japanese Yen, the percentage change in the box will represent EUR (base)/JPY (quote).

Data from Australia have shown that the Real Gross Domestic Product (GDP) grew at an annual rate of 2.1% in the second quarter. This data, after the 2.4% growth recorded in the first quarter, exceeded market expectations, which placed it at 1.7%. Pressured by risk aversion and the Reserve Bank of Australia’s cautious tone on the policy outlook, the pair AUD/USD played on Tuesday a new low of 2023 at 0.6356. As of early Wednesday, the pair is clinging to recovery gains around 0.6400.

He EUR/USD fell to three-month lows and approached 1.0700 on Tuesday. The pair rises during the European morning, but remains below 1.0750. Data from Germany showed on Wednesday that factory orders contracted 11.7% monthly in July, against the market forecast of a 4% decline.

He USD/JPY it broke above the 147.00 region and reached its highest level since November 2022. In response to the continued weakness of the Japanese Yen, Japan’s top currency diplomat Masato Kanda said they are closely monitoring currency movements with a high sense of urgency and reiterated that all options for currency movements are on the table. For his part, Hajime Takata, a member of the Board of the Bank of Japan, stated that “I think the Bank of Japan must patiently maintain a flexible policygiven the great uncertainty about the prospects”.

He GBP/USD closed Tuesday in negative territory amid USD strength. On Wednesday, the pair has a hard time bouncing and is trading flat, slightly above 1.2550.

He USD/CAD It is trading at its highest level in five months, around 1.3650, during the European morning. The Bank of Canada is expected to keep its interest rate at 5% after the September monetary policy meeting.

After a quiet start to the week, the price of Gold it tumbled and fell below $1,930 on Tuesday as the US 10-year yield rose strongly. The XAU/USD consolidates its losses near $1,925 in the early stages of the European session on Wednesday.

Source: Fx Street

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