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USD – United States Dollar
The U.S. dollar index has not changed this morning, despite a positive economic release. According to the Bureau of Economic Analysis (BEA), personal spending month-to-month increased $23.9 billion (0.1 percent) in July. The disposable personal income (DPI) increased $44.4 billion (0.3 percent) and personal consumption expenditures (PCE) increased $93.1 billion (0.6 percent).
China’s Minister of Commerce Gao Hucheng said China wouldn’t retaliate against Trump’s latest tariffs and confirmed that China and the U.S. are in contact. Trump followed by saying a talk was scheduled for today and that it would be at “a different level,” insinuating a better dialogue would take place. Trump is under increasing pressure from Republican senators who say that uncertainty on trade is contributing to a U.S. economic slowdown. However, this has not been clearly visible in recent economic data releases.
According to Market Watch, Federal Reserve Chairman Jerome Powell is perhaps going to get the last word before the central bank goes silent ahead of its September 17-18 policy meeting. Powell is scheduled to speak at the University of Zurich in Switzerland about the U.S. economic outlook and interest-rate policy next Friday, September 6. Stay tuned!
In Europe, the Head of the Dutch Central Banker, Klaas Knot, lowered market expectations for a significant stimulus package at the next ECB meeting. He said the European economy, “doesn’t yet warrant the resumption of quantitative easing.” He added that Q.E. should not resume unless the current slowdown worsens. The EUR/USD pair spiked on his comments. However, the incoming ECB President Christine Lagarde signaled that she would “follow Mario Draghi in keeping monetary policy ultra-loose.”
In New Zealand, the NZD/USD pair fell towards 0.6289, despite data showing that New Zealand consumer confidence rose in August. Furthermore, July building permits came in at 1.3 percent month to month, which was better than the previous -4 percent. At the time of this writing, the NZD/USD is trading at 0.6311, and it looks ready to continue bouncing during the North American session. Finally, Australia is on track to run its first current-account surplus since 1975. However, the cash rate is at a record low of 1 percent and forecast to drop to 0.5 percent next year.
USD/CAD: 1.3250 – 1.3315 ▼
EUR/USD: 1.0995 – 1.1081 ▼
GBP/USD: 1.2175 – 1.2219 ▲
AUD/USD: 0.6723 – 0.6742 ▲
NZD/USD: 0.6290 – 0.6320 ▼
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