Morning Update

Wednesday August 3rd, 2022

The US$ unchanged, oil is lower, equity markets and US yields are higher. Geopolitical uncertainty and hawkish comments from Fed member were the cause of the USD strengthening yesterday reversing the recent trend. As the market opened in Asia, the USD was giving up some of yesterday’s gain due in part to the lack of action from China related to Pelosi’s visit. U.S. midterm primaries proved successful for Trump-backed candidates. In other news. Russian naval ships have joined Chinese ships in the disputed territory of Taiwan. Russia accuses U.S. of direct Ukraine war role in missile attacks. U.N. nuclear chief warned that Europe’s largest nuclear power plant in Ukraine “is completely out of control”. US, Indonesia hold joint military drills amid China concerns. The currency markets. APAC currencies continue to face headwind this morning after yesterday’s selloff. 24-hour after testing the 130.00 level, the USD/JPY was moving toward 134.00 area. The USD gained against the other APAC currencies but not as aggressively as the USD/JPY.

Current level US$ Index              106.184        Unchanged

After a sharp sell-off from 1.3100 to 1.2780 area, the USD/CAD have bounced back and is hovering near it’s weekly high. Pressure on oil prices and geopolitical uncertainties are keeping the USD/CAD firm for the moment. However, it’s important to note that the C$ has fared reasonably well against other currencies. Support reset at 1.2814 while resistance moves to a 1.2895

Current level US$/C$                   1.2861            Down 0.16%

The EUR/USD has stabilized after yesterday’s selloff. This morning’s announcement of Retail sales (-3.7% - expected -1.7%) had very little effect on the market. We would expect the market to remain orderly until the release of the US ISM Services PMI later this morning. Support lowers to 1.0120, while resistance is at 1.0252.

Current level EUR/US$                1.0187          Up 0.24%

The EURGBP has for the moment found a base at 0.8350 after peaking at 0.8550 on July 26th. The same headwinds are present limiting the Euro move higher but some profit taking ahead of tomorrow’s BoE interest rate announcement are offering support for the currency pair. Support remains at .8345 (1.1983) while resistance stays at .8460 (1.1820).

Current level EUR/GBP    0.8365 (1.1949)        Up 0.16%

UK Final Services PMI revised downward this morning, exposing the slowest output growth in over a year. Employment rises markedly again despite subdued order books. Market participants are expecting a 25bps rate increase announcement tomorrow but key to future actions will be found in the meetings minute and policy makers comments. Support moves higher to 1.2155 while resistance resets at 1.2248.

Current level GBP/US$                1.2183            Up 0.09%

Other Ccy levels vs C$ - EURCAD 1.3099 GBPCAD 1.5651 AUDCAD .8915 CADCHF .7456 CADJPY 103.58 CADTHB 28.18 CADCNY 5.2488 CADNOK 7.5552 CADSEK 7.9394 CADDKK 5.6812 CADZAR 12.9984

Other Ccy levels vs US$ - JPY 133.13 CHF.9522 AUD.6931 NZD .6255 CNY 6.7515 MXN 20.6419 INR 79.1360 PLN 4.6084 CZK 24.20 ZAR 16.7234 ILS 3.3651 AED 3.6729 KWD 0.30648

Other Major X levels – EURCHF .9774 EURJPY 135.56 EURSEK 10.4066 EURNOK 9.9851 GBPCHF 1.1675 EURAUD 1.4692 GBPAUD 1.7553 AUDCHF .6652 AUDJPY 92.26 CHFJPY 138.79