The New York session once again saw the dollar taking a beating.  There appears to be no relief in sight for the Greenback.  New York traders started selling the dollar right out of the gate.  We saw EURUSD and GBPUSD lead the charge. EURUSD made new all time highs against the USD by trading up above the 1.4570 level while GBPUSD made new multi-decade highs by briefly trading above the 2.0900 level.  The carry trade was put on the back burner somewhat. The JPY crosses did however consolidate at lofty levels all day long as U.S. equities continued their rally off of yesterday's lows. USDCAD managed to take out the .9300 level overnight and NY decided they did not want to miss the gravy train and brought the pair even lower to test near the .9210/15 support area. This action in USDCAD continued even as several major financial institutions released reports stating that USDCAD is well undervalued. Perhaps by as much as 10%.  One would have to wonder if we may see intervention in this pair. This scenario may be highly unlikely as intervention would have to most likely be accompanied by an interest rate cut from the Bank of Canada. Economic data out of Canada does not point to an interest rate cut anytime soon.

While price action today was driven mostly by moves in equities we do have some events this week which could provide a catalyst for the markets.  First up is the Reserve bank of Australia's Cash Target Rate during Asian hours. The market is fully expecting an increase of rates from 6.5% to 6.75%. Later this week we get the Bank of England and ECB interest rate decisions.  Both are expected to remain steady but the markets have been surprised in the past.  The markets will also focus in on accompanying statements after these rate decisions for any clues to the direction of interest rates. Please see our economic calendar for exact times for all interest rate decisions.

Upcoming Economic Data Releases

  • 22:30 GMT Reserve Bank of Australia Cash Target Rate; expectations 6.75% from prior 6.5% (relevance high)
  • 23:50 GMT Japanese Machine Orders for Oct.; Expectations -135% vs. prior -7.7 %( relevance high)
  • 00:30 GMT Australian Home loans for Sept.; Expectations +0.1% vs. prior +1.6% (relevance high)