Thursday August 1st, 2024

The USD opens higher this morning as well as equities and oil prices while treasury yields soften. After much hype, the Fed as expected kept the interest rates stable and Powell’s statement confirmed the strong possibility for the first cut in September while the chances are high for one other in 2024. Perhaps tomorrow's Employment figure will offer a clue.

In other news.?Iranians turned out to mourn Hamas political leader Haniyeh who was assassinated in Teheran a few days ago. Iran and Palestinian Islamist militant have accused Israel of carrying the strike. Israel has not claimed responsibility for this.?It would be difficult for a cease fire negotiation to resume after Hamas’ negotiator was assassinated. A senior North Korean diplomat that recently defected claims that North Korea wants to restart nuclear talks if Trump wins.

In currency news. China's yuan weakened slightly against the U.S. dollar today, after surging in the previous session in line with Japanese yen, as data showed the country's economy was still struggling to stabilise. The Australian and New Zealand dollars steadied above recent lows on Thursday as a sharp fall in U.S. yields sparked a round of short-covering in the beaten-down currencies, while bonds extended gains on hopes of early rate cuts. South Africa's rand was steady early on Thursday, ahead of a purchasing managers' index (PMI) survey for the local manufacturing sector. Malaysian ringgit hits one-year high with investors cheering a possible end to the U.S. Federal Reserve's restrictive policy settings in September. As we start the day the USD is mixed. It rose against the CNY 0.33%, THB 0.23% while loosing ground against the MYR (-054%). The AUD and NZD are both trading lower against the USD -0.23% and 0.15% respectively. The USD has strengthened against the ZAR 0.11% and MXN 0.45%.

In commodity markets.?Oil prices continue its march higher with 0.77% gain. Gold reached a 2-week high as Fed opened the door for a September rate cut while Silver sold off 0.4%. Copper remains under pressure as concerns over China’s demand – the world largest customer. China’s demand worries are not only affecting Copper but also soybean (-0.24%). Wheat rose 0.24%.

Current level USD Index???????????????104.367 ? ? ? ? ? ?Up 0.16%

The USD/CAD attracted some buyers after touching 1.3785 yesterday.

Current level USD/CAD???????????????1.38330???????????? Flat

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The EUR/CAD lost some ground yesterday after spending the better part of week near/at its 8 month peak.

Current level EUR/CAD????????????????1.4909??????????? Down 0.25%

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The EUR/USD continued move lower s attributed to the improved USD due to a recovery in US Treasury yields ahead of US key economic data including ISM Manufacturing PMI and weekly Initial Jobless Claims.

Current level EUR/USD????????????????1.0779??????????? Down 0.42%

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The GBP/EUR sold off as the Eurozone inflation data raises doubt of an ECB cut I September while the BoE is set to announce their interest decision latre today?

Current level GBP/EUR???? 1.1842 (0.8441)????????Down 0.25%

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The GBP/USD awaits the BoE’s interest rate decision later today.

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Current level GBP/USD????????????????1.277 ???????????Down 0.61%