Currency Analyst since 2010

August 2: Asian session

US dollar headed for weekly gains against all its major peers as improvements in the US economy added to the case for the Fed to start tapering bond purchases which tend to debase the currency. ISM Manufacturing PMI rose in July to 55.4, the highest level since April 2011. Today watch for US non-farm payrolls data at 12:30 GMT (forecast: 184K; previous: 195K).

EUR/USD is trading around the psychological support of $1.3200 after it lost about 100 pips yesterday. Demand for euro was limited after the ECB President Mario Draghi said yesterday policy makers expect interest rates in the region to stay low for an extended period.

GBP/USD is trading just above $1.5100 after it slid by about 90 pips yesterday. The Bank of England left investors waiting for an expected announcement next week of a new strategy to get British economy back in shape.

USD/JPY is around 99.55 after it gained about 170 pips yesterday. USD/CHF is trading above the 200-day MA at 0.9360 after it gained more than 100 pips yesterday.

AUD/USD slid to the new almost 3-year low at $0.8889 as the Reserve Bank of Australia is expected to cut rates next week. Australian producer inflation turned out to be lower than expected (0.1% vs. 0.5%). NZD/USD fell by more than 100 pips yesterday and is trading in the $0.7887 area. USD/CAD rose to 1.0350.

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