DBS Group Research economist Philip Wee argues that Asian currencies may face repricing risk as global policymakers increasingly resist competitive depreciation.
EUR/USD trades on the front foot near 1.1560 on Wednesday, adding around 0.2% as a weak United States (US) labor market report undermines the US Dollar (USD).
Silver (XAG/USD) price surges more than 4% on Wednesday as the Greenback remains on the back foot due to softer-than-expected jobs and data, though the fall was capped as business activity in the services sector continued to expand.
Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is slightly firmer versus the US Dollar (USD), with modestly better PMIs but a fading fundamental backdrop as 2-year spreads give back gains since late June.
Gold (XAU/USD) price surges to its highest level in nearly seven weeks, gaining nearly 3.80% on Wednesday as the Greenback loses ground and US Treasury yields fail to gain traction. The XAU/USD pair trades at $4,232, its highest level since June 18, after bouncing off daily lows of $4,065.
West Texas Intermediate (WTI) Crude Oil remains under pressure on Wednesday but struggles to attract fresh selling as traders await confirmation that commercial shipping through the Strait of Hormuz will resume. At the time of writing, WTI trades around $74 per barrel, hovering near three-week lows.
The Swiss Franc (CHF) strengthens against the US Dollar (USD) on Wednesday as weaker-than-expected US economic data pressures the Greenback, while traders closely follow efforts to reopen the Strait of Hormuz. At the time of writing, USD/CHF trades around 0.8078, down nearly 0.18% on the day.
The Dow Jones Industrial Average (DJIA) trades near 54,500 on Wednesday, 0.76% higher and at a fresh record, roughly 1,400 points above the high it set in early July.
USD/JPY trades around 157.65 on Wednesday at the time of writing, little changed on the day, as weakness in the US Dollar (USD) is offset by investors' cautious stance toward the Japanese Yen (JPY).
The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against a basket of six major currencies, trades modestly lower near 99.80 on Wednesday, shedding around 0.15% after a stagflationary batch of United States (US) data.
The Pound Sterling (GBP) advances some 0.12% on Wednesday as the US Dollar (USD) registers back-to-back days of losses, after US jobs data was softer than expected, even though business activity in the services sector continues to expand solidly. The GBP/USD pair trades at 1.3467.
Silver (XAG/USD) jumps more than 4% on Wednesday as weaker-than-expected US ADP employment data and easing energy-driven inflation prompt traders to scale back expectations for Federal Reserve (Fed) rate hikes. At the time of writing, XAG/USD trades around $62.30, near its highest level in a month.
EUR/JPY trades broadly flat near 181.94 on Wednesday, up a marginal 0.01% as the cross pauses after a steady four-session recovery.
AUD/USD trades around 0.7060 on Wednesday at the time of writing, up 0.20% on the day. The pair benefits from broad-based US Dollar (USD) weakness as investors react to softer-than-expected US economic data and improved risk sentiment driven by the latest geopolitical developments.
Scotiabank strategists Shaun Osborne and Eric Theoret describe the Euro (EUR) as steady in the mid-to-lower 1.15 area, trading close to fair value based on 2-year US–Germany spreads. Fundamentals and sentiment are seen as constructive, underpinning EUR recovery since early Q3.
TD Securities strategists expect only modest US Dollar (USD) weakness if July payrolls or the unemployment rate disappoint.
On Wednesday, the US removed Iran-related sanctions, according to the US Treasury Department’s website. The US Treasury lifted sanctions imposed on two aircraft linked to the Islamic Revolutionary Guard Corps (IRGC) and three airlines.
BNY’s Geoff Yu notes Brazilian portfolio inflows are near post-COVID highs ahead of the Selic decision, with strong demand for equities and government bonds.
EUR/USD trades modestly higher on Wednesday as weaker-than-expected US labor market data and easing energy-driven inflation risks temper Federal Reserve (Fed) rate-hike expectations and weigh on the US Dollar (USD).
Brown Brothers Harriman’s (BBH) Elias Haddad notes the New Zealand Dollar and local yields slumped after strong Q2 employment and wage gains were offset by rising labor supply and higher unemployment.
Societe Generale’s Kunal Kundu and Galvin Chia judge the Reserve Bank of India's (RBI) August policy outcome as neutral for the Indian Rupee (INR). They highlight fewer comments on INR and flows, but recall Governor Malhotra’s view that INR is not undervalued.
TD Securities strategists see the recent intervention-driven USD/JPY decline as cyclical rather than regime-changing. They expect December as the more likely timing for the next Bank of Japan (BoJ) hike and doubt sustained joint US‑Japan intervention support.
Rabobank's Senior FX Strategist Jane Foley discusses recent British Pound (GBP) weakness versus the Euro (EUR), linking it to reduced Bank of England (BoE) tightening expectations and political developments under UK Prime Minister Burnham.
BNY’s Geoff Yu reports Oil prices rose after the Houthis claimed a missile strike on a Saudi tanker near Yanbu, highlighting risks to alternative export routes while Strait of Hormuz disruptions persist.
Reuters’ latest poll of foreign exchange strategists shows a modest downward revision in Euro (EUR) forecasts while highlighting persistent market skepticism over the effectiveness of Japanese currency intervention.
Brown Brothers Harriman’s (BBH) Elias Haddad reports USD/INR is firmer after recently testing a one‑month low, following the Reserve Bank of India’s (RBI) unanimous decision to keep its policy rate at 5.25% and maintain a neutral bias.
Commerzbank’s Norman Liebke notes that markets expect a further 25 bps cut from the Brazilian Central Bank (BCB), but real rates would remain highly restrictive near 9.4%.
USD/CAD trades around 1.4040 on Wednesday at the time of writing, down 0.14% on the day, as the Canadian Dollar (CAD) benefits from a rebound in Oil prices.
Gold (XAU/USD) jumps more than 3.50% on Wednesday as weaker-than-expected US labour market data pressures the US Dollar (USD), while lower Oil prices on hopes of reopening the Strait of Hormuz ease inflation concerns and weaken expectations for Federal Reserve (Fed) rate hikes.
Fresh data from the Institute for Supply Management (ISM) showed the Services PMI improving a tad to 54.1 in July from 54 in the previous month, coming in short of expectations at 54.5 and signaling some marginal pickup of momentum in the sector.
Exclusive insights, trading signals, and real-time updates for registered users.