Currency Analyst since 2010

July 4: Asian session

The Dollar Index remained lower after declining yesterday from a 1-month high ahead of a US payrolls report on Friday that may help signal whether the economy is strong enough for the Fed to start tapering bond purchases.

EUR/USD is trading just below $1.3000. Yesterday the pair tested $1.2923, but managed to close above $1.30. Euro traded 0.6% from its weakest in more than a month before the ECB meets today following recent comments from President Mario Draghi that monetary policy will stay accommodative. EUR/JPY falls for the second day as Portugal’s 10-year bonds slumped with the yields climbing above 8% for the first time since November and 2 of the nation’s ministers resigned, reigniting concern Europe’s sovereign-debt crisis is worsening. GBP/USD declined to the $1.5250 area after it bounced to $1.5300 yesterday on the upbeat services PMI. The Bank of England is expected to leave policy unchanged. It’s the first meeting for Mark Carney as the head of British central bank.  

USD/JPY is consolidating below the 100 mark following the yesterday’s rise to 100.85. According to the Bank of Japan’s governor Kuroda, the regulator will continue easing until 2% CPI growth becomes stable. The economy is on track to meet the central bank’s projection of a moderate recovery in a half of a year. USD/CHF attempts to rebound, but is trading slightly below $0.9500, down from the recent $0.9530 highs.

AUD/USD rebounded from the yesterday’s low of $0.9040 to $0.9130. Aussie was supported as RBA deputy governor Lowe said that yesterday’s Stevens’ words were much less dovish than the market interpreted. NZD/USD is consolidating around $0.7780. USD/CAD once again started the day in the 1.0500 zone. On the upside the pair remains below Tuesday’s high at 1.0577, the maximal level since October 2011.  

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