Forex today: US economy not looking so convincing and FX traders feeling it

Forex today was a mixed bag and mostly in a consolidation of Friday's US close while markets cut short the Fed's rate hike path.

Traders remained sceptical around the US's performance after last week's disappointing data dump, cementing Yellen's voiced concerns from her recent testimony that takes further rate hikes of the table until at least December this year.  

US politics remains up in the air with some rumours that the GOP is switching to a tax plan instead of stalling on the health care bill, but this had little market impact in the FX space. The NY Empire State Manufacturing Index (Jul) came in at 9.8 vs 15.0 consensus and 19.8 prior. 

The dollar fell again this Monday. 95.01 was the low in the DXY and closes down -0.01% from 95.15 having made a high of 95.34. The benchmark US-10 years were also under water, down -1.22%, having traded in a range of between 2.2980% - 2.3337%. 

EUR/USD traders prefer to buy dips with eyes on the 1.15 handle still, supported by the IMF's bullish review of Macron's economic plans while USD/JPY is supported at the 38.2% fibo of the Jun-Jul rise at 112.32, with the minor recovery stalling at 112.86 the high. Brexit talks that kicked off today in Brussels kept a lid on the pound and traders take the cream of the profits from the 1.31 handle, supported still by 1.3050. 

The commodity bloc was mixed, and metals in the green failed to support the Aussie higher as traders wait in anticipation of this week's jobs data and bulls rest up in the consolidation of the recently posted fresh highs. Further risks for the Aussie comes from RBA speakers and jawboning could well be in the cards, further weighing the commodity currency, despite dollar weakness and a positive tone from China's data overnight. The CAD was a profit taking story with weakness in WTI again. The bird was also soft, -0.35%.

Key Asia events:

RBA minutes is on the cards and NZ CPI.

Key notes from the US session:

US Dollar recaptures 95 on a technical recovery

London's McGuiness: Britain must negotiate staggered departure from EU in next few months

OPEC cutbacks fail to reach target in June - Bloomberg

Fed: Markets doubt about commitment to raise interest rates - BBH

 

 

 

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