The AUD is the strongest and the EUR is the weakest as Europe head home

Technical Analysis

Author: Greg Michalowski | eurusd

AUD overtakes the GBP and EUR runs by a string of currencies

As European traders look toward the exit, the AUD and the GBP switched spots as the strongest currency, while the EUR raced past the CAD, USD, NZD, CHF and JPY to become the weakest currency on the day.  

Here is the early NA session snapshot.

AUD overtakes the GBP and EUR runs by a string of currencies
Here is the current snapshot. The EUR is leading the chart to the downside with the CHF in the runner up position still. The JPY is still lower but off lower levels.  

The EUR is the weakest now.
Clearly, the EURs move is the story.  What was the catalyst?

At around 9:45 AM ET/1345 GMT ECB's Rehn said

  • "It's important that we come up with a significant and impactful policy package in September"
  • "When you're working with financial markets, it's often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker"
The market started to put a slightly better than 50% chance on a 20 basis point cut, rather than the now-standard 10-bps move at the September meeting.  

Better US data was also a help (retail sales, Empire manufacturing and Philly Businsess outlook all were better) .  Atlanta Feds GDPNow reflected the better data by raising their expectations for GDP growth to 2.2% from 1.9% last week.   That is a pretty good jump. 

In other markets: 

  • Spot gold is up $4.70 or 0.31% of $1521. It was at $1515.40 at the start of the day
  • WTI crude oil futures are trading down $0.78 or -1.4% at $54.46. The contract was trading at $54.61 at the start of the day
In the US stock market:
  • Dow is up 76 points or 0.3% at 25555. Was up 153 points in premarket trading at the start of the day
  • S&P index is up 6.9 points or 0.25% 2847.57.  Was up 19 points in premarket trading at the start of the day
  • Nasdaq is down to .1 points or -0.3% at 7771.  Was up 35 points in premarket trading at the start of the day
In the US debt market, yields are still under pressure with the two year down -7.7 basis points and the 30 year down -3.2 basis points.

US yields are down


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