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By xemarketanalysis July 13, 2018 10:31 am
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    XE Market Analysis: Dollar Wears with Crown as Trump Rubs Brexit Salt

    OVERVIEW

    • Mighty US Dollar at a 2-week high against majors.
    • Kiwi squeezed to a 2-year low after investors dump commodity currencies.
    • WTI oils steady after falling nearly 6% over the past 2 days.

    HIGHLIGHT

    The Turkish Lira lost 5.5% of its spot value of the past five trading sessions and is the worst performing EMEA currency. USD/TRY touched a record high of 4.97 as investors sentiment continue to deteriorate. Turkey’s president appointed his son-in-law as Treasury and finance minister and he has issued a decree empowering to name the head of the central bank. He continues to tighten his grip over monetary policy, sending the Lira lower.  

    US DOLLAR

    The Greenback is closing on a two-week high against its G-10 peers. Fed Chair Powell injected optimism in the US economy as he believed the economic indicators on his dashboard showed they are in the right trajectory. Like many others, he also believed global trade tension is unhealthy. Scandinavian currencies are under pressure this morning and the Kiwi is down 0.6% touching a two-year low. The economic calendar is light today with University of Michigan Consumer Sentiment index on the docket.

    BRITISH POUND

    Brexit (yes again) is like that nightmare that which does not want to go away. UK’s exit plan from the EU continues to cause panic bursts within the government. The British Pound is lower against the US Dollar, dipping under the 1.32 handle. The US President’s comments on the Brexit plan rubbed salt into open wounds as he indicated that a softer Brexit would mean trade deals with the US was “probably” off the table. With no data for release today, investors will continue to keep an eye on the political situation and we expect the GBP to remain fragile.

    EURO

    EUR/USD is trading with a negative tone as we close the week. The Euro is down 0.3%, losing for the fourth day in a row due to a lack of meaning data out of the Eurozone and speculative positions. The ECB has pretty much set all expectations, signalling no change in current monetary stance until at least next summer.

    CANADIAN DOLLAR

    The Canadian Dollar comes under pressure again amidst commodities selloff. The Loonie is currently down 0.4% against the US Dollar. Hawkish comments from the Fed and oil prices trading lower has put pressure on the local currency. With no data for release today, we expect the pair to cues from global trade sentiments.

    AUSTRALIAN DOLLAR

    The Aussie is off the lows but still heading for a weekly decline against a strong US Dollar. The Greenback continues to flex its muscle following bullish projection from Fed Chief Powell.  Chinese trade surplus data was better than expected and provided some support. However, the pair is expected to be under pressure amid broad-based USD buying interests.

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