Dollar Slips Again in Summer Trading

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Dollar Slips Again in Summer Trading

AUGUST 03, 2021

Much like yesterday morning, the U.S. dollar is slightly softer to start the trading day.

Overview

Indeed, the Dollar Index has retreated six out of the last seven sessions.  There isn’t much news to trade off of so most analysts point to a strong earnings season and gains in domestic equity markets for the lack of demand for the greenback.

This morning’s data could spark limited volatility.  Both durable goods and factory orders for the month of June are due to cross the wire at 10 a.m.  However, with a lack of major economic risk events over the next few days, the dollar could trade in sleepy summer ranges.  That will likely change on Friday with the release of the much anticipated Non-Farm payrolls print.  Expect fireworks on Friday morning at 8:30 a.m. following the release.

What to Watch Today…

  • Durable Goods and Factory Orders at 10 a.m.

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Q2 2021 Bloomberg Win

EUR  

The Euro remains near the top of recent ranges against the U.S. dollar. The common currency is benefiting from improved risk sentiment as European stocks trade at their all-time highs.

The Euro also found support from continued positive data.  Both German purchasing managers’ index and retail sales topped forecasts, a strong sign for the bloc’s largest economy.

Despite the Euro’s run of slow gains, the common currency remains below levels last seen in June when the Federal Reserve made a hawkish pivot that sent the USD gaining across the board.

AUD  

The Australian dollar continued its positive momentum from yesterday and bounced off its YTD low following a surprise from the Reserve Bank of Australia.  The RBA stated that they will stick to their tapering plan despite the risks of the delta variant of Covid 19.

Many had expected the central bank to hold off until the threat of the newest outbreak passed.

AUD/USD initially jumped over half a percent stronger but has relinquished some of those gains.  The result puts the AUD/USD basically unchanged from last Thursday’s close.

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