The U.S. Dollar is trading weaker following a report that showed an improvement in the U.S. Service Sector.
The U.S. Dollar is trading weaker following a report that showed an improvement in the U.S. Service Sector. Traders had estimated the report to show a rise to 50. The actual number was 50.9. Trader demand for risky assets increased following the release of this number.
The EUR USD added to early gains following the release of the better than expected USM ISM report. The Euro was already trading higher because of comments from the G-7 which weakened the Dollar. Trader appetite for risk is helping to draw buying interest to the Euro.
Weak fundamentals continue to keep pressure on the GBP USD. Losses are being limited by a pick-up in demand for higher yielding assets.
The USD JPY is trading slightly lower this morning but traders are waiting for signs of a follow-through to the upside following last week’s closing price reversal bottom. The threat of an intervention by the Bank of Japan is also possible if trading becomes volatile or abnormal. The BoJ wants prices to reflect actual economic scenarios and not excessive speculation.
Firm equity and gold markets are giving the Canadian Dollar a boost this morning. Losses have been limited in the USD CAD because of weaker crude oil prices. Look for an acceleration to the downside if crude oil starts to rally.
The AUD USD and NZD USD are trading higher because of an increase in demand for higher yielding assets. Traders are placing long bets on the Aussie that the Reserve Bank of Australia will hike its benchmark interest rate by 0.25%. The announcement will be made at tomorrow’s meeting.