US Dollar Holds Steady Ahead of ECB Forum and US Jobs Data
The US dollar is primarily fluctuating within the ranges observed prior to the weekend. Shortly before the weekend, following the market’s closure, the US confirmed new strikes on Iran, and additional hostilities occurred over the weekend. Yet, prior to the commencement of trading today, the United States and Iran reached an agreement on a new “ceasefire.” Traffic in the Strait of Hormuz has reportedly decelerated, leading to a firmer stance in oil prices. Amid the considerations of month-end and quarter-end, the ECB annual conference in Sintra is set to capture attention, featuring speeches from Lagarde, Bailey, Macklem, and Warsh on Wednesday. In light of the US holiday on Friday, the June jobs data will be released on Thursday. The survey currently stands at 113k. Last year, the United States generated approximately 10,000 jobs on average. Through May this year, the average stands at nearly 115,000. China has introduced a new policy rate, the overnight reverse repo, which seems to indicate a potential rate cut in today’s initial operation. Separately, China has intensified its conflict with Japan by adding 20 Japanese companies to its export control list.
The euro approached $1.1435 at the conclusion of the previous week, subsequently retreating to the midpoint of the session’s range, around $1.1385, during the final hours of trading. The high was a few hundredths of a cent shy of the 38.2% retracement of the euro’s retreat since the mid-month high of approximately $1.1620. It is currently fluctuating within a range of $1.1380 to $1.1415 today. It is positioned around the $1.140 area late in the European morning, where options for 1.3 billion euros at $1.1400 are set to expire today. In the past three sessions, the dollar has remained within a defined range against the Japanese yen, specifically between JPY161.50 and JPY161.95. It continues to reside within that range today. At the lower end of that range, there exist options valued at $2.3 billion that are set to expire today. Last week, the dollar experienced an increase of slightly more than 0.25%. It marked the sixth consecutive weekly increase in the last seven weeks.
Sterling briefly traded above $1.3230 ahead of the weekend, marking its best level in three sessions. The 38.2% retracement objective of the losses since the mid-May high is nearly $1.3265. Sterling has remained within a limited range of approximately $1.3190 to nearly $1.3230 thus far today. The new Labour MP and aspiring prime minister, Burnham, is anticipated to deliver a significant economic address this week, during which he may announce his choice for chancellor. It remains uncertain if he will encounter significant resistance in the leadership contest. The Canadian dollar’s rebound following a decline over ten consecutive sessions up to the middle of last week appeared to be tepid. The greenback retreated from nearly CAD1.4250 to approximately CAD1.4170. The previous week’s high was approximately CAD1.4185. It has fluctuated between CAD 1.4175 and nearly CAD 1.4210 today. A convincing break of CAD1.4135 would enhance confidence that a top is in place.
The Australian dollar’s recovery from its lowest level since early April (~$0.6875) was lacklustre as the weekend approached. It recorded a new session high in North America, slightly above $0.6915. It is exhibiting a sideways trading pattern today, oscillating between approximately $0.6880 and $0.6110. It appears to be currently positioned between the 200-day moving average (~$0.6860) and the five-day moving average (~$0.6925), a level it has not surpassed since June 16.
