Daily Market Update

Dollar Stuck in Ranges as Summer Trading Takes Hold

August 18, 2017

The U.S. dollar opened this morning in familiar ranges against most of its majors.  Despite a number of events that sparked short-term volatility, currency markets, in general, have held rather tight, summer-trading ranges this week.

 

USD

The U.S. dollar opened this morning in familiar ranges against most of its majors.  Despite a number of events that sparked short-term volatility, currency markets, in general, have held rather tight, summer-trading ranges this week.   As all of the week’s major risk events are in the rearview mirror, expect more of the same to close the week.

It is worth noting that Traders are cutting their expectations of a rate hike following a tumultuous week in Washington, cautious Fed minutes and lukewarm economic data.  Odds now sit at 30% for a December rate hike from 40% earlier in the week.   

At 10 a.m. Eastern, the University of Michigan will release its consumer sentiment report, which is supposed to show a slight tick higher in August.  Dallas Fed President Robert Kaplan will speak in Dallas later this morning.  He will field questions from the audience but the event is likely to be a non-event.  The Jackson Hole summit is this weekend to expect headlines from the event to be reflected in Monday’s price moves. 

 

EUR

The Euro has thus far shrugged off the horrific, apparent terrorist attack(s) in Barcelona yesterday.  Details are still sketchy but at the time of writing, at least 13 people have been confirmed dead and many more injured after truck barreled down La Ramblas, a scenic pedestrian strip in the Catalonian city.  Equities have taken the brunt of the economic reaction to the news.  The Euro Stoxx 600 index is down over 1% and American futures show U.S. shares will continue yesterday’s tumble. 

There is no major data slated for a release out of the Eurozone today, so expect the currency to take it cues from technical trading and Barcelona related headlines. 

 

JPY

The Japanese yen has been the beneficiary of worldwide risk-off sentiment yesterday and overnight.  The terrorist attack in Barcelona was the catalyst for what many have said was an overdue sell-off in global equities.  U.S. stocks fell a percent yesterday and European stocks were hammered overnight.  Traders flocked to the perceived safety of the safe-have Japanese yen and the currency gained nearly half a percent.  At the time of writing, the yen is at a one-week high against the U.S. dollar.  

  

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