Forex headlines for August 25, 2014:

Britain was off for a holiday and evidently a few US traders decided to do the same. A long weekend is coming and it’s the last weekend of “summer” so a quiet start is no surprise.

The main moves came at the week’s opening when the US dollar gapped higher against the euro, yen and pound. From there fates diverged. EUR/USD remained lower and traded in a 15 pip range around 1.3195. USD/JPY erased most of the gains and closed virtually flat at 104.00 and cable erased all the losses and finished higher on the day at 1.6585.

Those moves came in Europe and it was generally consolidation in US trading. The exceptions were the commodity currencies. USD/CAD is threatening the August highs and sits just a few pips away at 1.0981 after gaining 30 pips. The Tim Hortons/Burger King news was negative for the pair but comments from Poloz on the weekend were dovish.

AUD/USD was on the defensive and edged down to 0.9295 from 0.9315. One driver of USD strength was the record in stocks and it underlines how buoyant the US dollar