The greenback is down throughout the board at the moment, giving again a bit of the positive aspects from after the US PPI knowledge yesterday. EUR/USD is again up by 0.3% to 1.1680, with massive choice expiries additionally in play for the pair. In the meantime, USD/JPY is probably the most notable mover as it’s down 0.6% to be again underneath the 147.00 stage.
USD/JPY 4-hourly chart
The drop in USD/JPY at the moment additionally owes to merchants feeling out odds of a faster BOJ fee hike after the better-than-expected Japan Q2 GDP knowledge.
Elsewhere, the market strikes are extra measured with GBP/USD up simply 0.1% to 1.3548 and USD/CAD down 0.2% to 1.3793 on the day. Even AUD/USD is barely seen up 0.2% to 0.6506 at present.
Total, it does not mirror all an excessive amount of urge for food nevertheless it speaks to greenback sentiment within the greater image in the mean time. Merchants are firmly urgent down on the foreign money in desirous to push the Fed for a fee minimize in September.
However on the similar time, that may current a possible flooring for the greenback with policymakers having explicitly ruling out a 50 bps transfer. A 25 bps fee minimize is priced in now and that speaks to restricted draw back for the foreign money by way of Fed outlook pricing.
Nonetheless, there are different considerations for the greenback within the grand scheme of issues. Fed independence and BLS credibility are each at stake amid Trump’s political takeover of each establishments and the dangers of that shouldn’t be undermined.
As for now, merchants might need to only stick to extra of a push and pull temper till Jackson Gap after which the US jobs report on 5 September.