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By xemarketanalysis July 17, 2018 1:07 pm
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    XE Market Analysis: The Greenback Feeling Flat After Russian Roulette

    OVERVIEW

    • USD threading waters as investors wait for the Powell show in Capitol Hill.
    • British Pound is the worst G-10 performer over concerns that UK PM is losing power grip.
    • WTI is trying to recover after falling sharply 4.65% yesterday.

    HIGHLIGHT

    Investors have switched their attention to Powell’s show and the Mexican Peso that has halted its three-day winning run. IMF has cut Mexico’s 2019 growth outlook due to NAFTA uncertainty. The currency, though has been the best Latin performer this quarter, is appreciating more than 5%. 

    US DOLLAR

    The Greenback is trading flat against its major peers as investors turn their attention to Fed Chair Powell’s testimony on the Capitol Hill. The focus will be on the pace of future rate hikes, the impact of trade tensions, and the hot topic of the yield curve. Meanwhile, crude oil prices are stable this morning, after falling sharply by 4.65% yesterday. The British Pound has moved into negative territory amid concerns that support for PM May is thinning.

    BRITISH POUND

    The unemployment rate in the UK was at 4.2%, down from 4.5% a year ago and the lowest since 1975. Yet, the data from the Labour Force Survey failed to inspire the GBP bulls. GBP/USD is the worst performer after Governor Carney warned over the Brexit potential risks in the BoE’s Financial Stability Report. PM May survived again after a Brexit-related custom bill passed the House of Commons. However, investors are feeling concerned that the PM is slowly losing the majority in the House. 

    EURO

    EUR/USD is failed to maintain its ground and is slowly sliding below the 1.17 handle. There was no data out of the Eurozone and the pair has been driven mainly by USD dynamics and cross currency trades. Investors prefer to adopt some cautiousness ahead of Powell’s semi-annual testimony.

    CANADIAN DOLLAR

    The Canadian Dollar is weak, trading lower against its US counterpart. The Loonie is feeling the effect of lower oil futures prices and trade tensions. WTI dropped to a 4-week low. Meanwhile, the US Administration has filed claims with the WTO against Canada in retaliatory moves. Manufacturing sales rose in 14 out of 21 industries and was up 1.4% in May but failed to inspire CAD bulls.

    AUSTRALIAN DOLLAR

    The Aussie is down 0.3%, cracking below the 0.74 level as we enter the North American session. In its latest meeting (July 3rd), the central bank reiterated that there is no need for short-term policy changes. Inflation is expected to remain low. RBA also warned that trade tensions and rising protectionism will negatively impact the economy.

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