Forex news for New York trade on Aug 31, 2020:
- Fed's Clarida: Benefits of yield curve targeting may be modest
- ECB's Schnabel: No need to adjust policy if economy performs to forecast
- Canada July building permits -3.0% vs +5.5% expected
- Canada July industrial product price +0.7% vs +0.4% prior
- Germany August preliminary CPI 0.0% vs +0.1% y/y expected
- Germany will revise higher -6.2% 2020 GDP forecast on Tuesday - report
- Fed's Bostic: Economic recovery leveled off in July, August
- Dallas Fed August manufacturing index +8.0 vs 0.0 expected
Markets:
- Gold up $5 to $1970
- WTI crude oil down 11-cents to $42.86
- US 10-year yields down 1 bps to 0.71%
- S&P 500 down 8 points to 3499
- CAD leads, JPY lags
- AUD leads on the month, JPY lags
It was another exciting month but it fizzled at the end. London was on holiday and that sapped fixing flows but there was some dollar-selling to go through and it weighed.
The dollar was generally soft once again and the DXY took out the key 92 level at the peak of the selling. After the fix, the moves peaked and it was sideways sailing from there.
Scaling out to the longer-term charts highlights how soft the dollar has been. USD/CAD briefly took out the low since January, the euro is near a two year high,
One exception in the dollar trade was was the yen. Buffett's investment didn't spark any kind of infllow into Japan. Instead, the yen lagged substantially even as the Nikkei jumped. USD/JPY fought its way to 106.10 at the high before peeling back 20 pips.
The overall price action sets September through year-end as a make-or-break moment for the dollar.
