Currency Analyst since 2010

August 23: Asian session

US dollar is poised for a weekly gain against most major peers as economic data supported the case for the Fed to reduce stimulus as early as next month

Euro growth remains subdued this week after the EUR/USD pair touched $1.3450 on Tuesday. Today the pair is trading in the negative territory around $1.3330, but holds above the Thursday’s low at $1.3300: yesterday the pair formed a narrow candle with a long lower shadow, supported by weak US jobless claims. There are no important data releases in the EZ today. The ECB’s Nowotny made an important comment today, saying the good economic news removes need for rate cut.

USD/JPY rose to 99.00. EUR/JPY rose to 1-month high at 132.33. Nikkei 225 rose by almost 3%. Yen weakened before the Bank of Japan Governor Haruhiko Kuroda speaks tomorrow at the Federal Reserve’s annual monetary conference in Jackson Hole. GBP/USD is calmly trading around the yesterday’s close level ($1.5600/5575 range) following the recent sharp drop from $1.5715. Watch the UK second estimate Q2 GDP at 8:30 GMT (forecast and prior: +0.6% q/q). USD/CHF is up at 0.9250 after yesterday’s spike to 0.9290.

Asian markets traded mostly in the green, following the recovery seen in global equities on Thursday and on a new round of rumors that the People’s Bank of China may cut the reserve ratio requirements (RRR) towards the end of the year. AUD/USD is a bit on the upside, but below resistance at $0.9040. NZD/USD also tried to move higher, but was limited around $0.7860. USD/CAD keeps conquering new highs, currently trading at $1.0545. Canada will release inflation data at 12:30 GMT.

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