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Euro still at the races

On Tuesday, in the first half of the European trading session, low trading volume was observed on the majors. Markets are most likely in wait-and-see mode due to the meeting of the US Federal Reserve. The US dollar index (DXY) is trading at a level of 91.65 (-0.17%), i.e. slightly down on yesterday’s closing price.

Although the DXY is nearly at a two-and-a-half-year low, there’s little interest among market participants in buying the dollar. The main reason for this is the sluggish pace of economic growth in the US. It’s important to note that last week; the Atlanta Fed significantly downgraded its economic growth forecast for the US in the third quarter from 3.0% to 2.2%, while the New York Fed also downgraded theirs; from 2.06% to 1.34%.

The euro continues to behave confidently. Today, the euro index (ECX) is trading at the 95.33 mark (+0.26%), matching its highest value since the end of 2014. The ZEW economic sentiment survey for the Eurozone in September, published today at 12:00 (GMT+3), came out at 31.7 points, beating July’s value of 29.3 points. The index’s growth indicates that there’s currently no sign of the growth in economic activity across the Eurozone slowing down. Accordingly, stable demand for the euro looks set to continue.

The British pound is trading flat against the US dollar today compared to Monday’s trading session. The GBPUSD pair is currently trading at the 1.3494 mark (-0.01%). There aren’t any important data releases planned for the UK today and so the GBPUSD pair will most likely take its cue from EURUSD.

The Japanese yen is currently trading at similar levels to those seen at the Bank of Japan’s July meeting. One US dollar is currently trading at 111.50 JPY. The Bank of Japan is holding its next meeting on monetary policy on Thursday the 21st of September. I reckon that trading the USDJPY pair will remain within a range of 111 – 112 for the next 24 hours.

The Australian dollar is trading up against its US counterpart today. At the time of writing, the AUDUSD pair is trading at a level of 0.8003 (+0.55%). The Aussie was given a boost early this morning by the Reserve Bank of Australia (RBA). At 4:30 (GMT+3), the minutes of the RBA’s latest meeting on monetary policy were published. The Australian regulator continues to show a desire to maintain an ultra-loose monetary policy.

Today, between 16:00 (GMT+3) and 18:00 (GMT+3), New Zealand’s GDT price index will be published; an indicator for dairy product prices. Given that around 20 – 25% of New Zealand’s exports are dairy products, it’s important to understand that volatility on currency pairs involving the Kiwi dollar could significantly rise around the time of publication.


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