The US dollar is rebounding from yesterday’s losses after New York Fed President Bill Dudley said in a TV interview that a September meeting interest rate hike was still possible. Investors welcomed the news ahead of tonight’s Fed meeting, with futures markets increasing the chance for an end-of-year interest rate hike to above 50%. Those odds could increase if strong labor and inflation results come out over the next few weeks, which could push the dollar higher.
The pound is trading lower against the US dollar this morning despite the (mostly pre-Brexit) unemployment rate data being in line with analyst expectations. Tomorrow’s retail sales data for July will be more telling on how the UK is handling the Brexit vote fallout. Should retail sales data come in below analysts’ already low expectations, the pound could set new post-Brexit lows.
The euro is trading mostly flat on today’s light data, as investors wait for tomorrow’s post-Brexit consumer inflation data for the broader Eurozone from July. The region has held strong so far since the vote, but a negative surprise tomorrow could put pressure on the euro.
Elsewhere, the Aussie dollar is down as investors suspend their optimism for Australia as they await July’s employment and participation data. The Canadian dollar is trading slightly lower as oil prices dip.
EURUSD: The euro is trading mostly flat in a light data day.
GBPUSD: The pound is down against a stronger dollar despite June’s unemployment rate data meeting analyst expectations.
AUDUSD: The Aussie dollar is trending lower as investors hedge their optimism ahead of tonight’s unemployment data.
USDCAD: The Canadian dollar is dipping along with oil prices.