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XTB TRADEBEAT

US dollar sinks to 33-month low

Summary:

  • USD falls to its lowest level in almost 3 years
  • CAD trims recent gains after large drop in full time employment
  • Cryptocurrencies drop as China shutters local exchanges
  • GBP holds up despite mixed data

The US dollar has seen a further wave of selling today with the trade weighted index for the buck falling o a 33-month low. A potentially significant break lower in the USDJPY has occurred and dollar bulls are feeling the pain as there appears to be little by the way of let up in the downtrend that has persisted for much of the year. The decline in the greenback has also boosted Gold which moved above 1350 earlier on to post a 2017 high. 

The strong recent streak of Canadian data has seemingly continued this afternoon with the employment change figure coming in at +22.2k vs +17.8k exp - the 11th occasion out of the last 13 when this labour market indicator has beat forecasts. However, upon closer inspection the release isn’t as positive for CAD as it initially appears. The increase is solely down to a huge jump in part time jobs, with full time roles falling sharply in what could be seen as an early warning sign.

News that China plans to shutter local cryptocurrency exchanges has weighed on the asset class today with all 5 instruments currently in the red. The move comes not long after PBOC announced a ban on initial coin offerings (ICOs) and the increasingly hostile stance taken by the Far East on crypto is threatening to cut of a potentially huge source of demand.

On a relatively quiet day of economic releases the GBP shrugged off a mixed bag of data.The latest bag of the macroeconomic data from the UK’s economy this week was fairly mixed. Although, manufacturing production easily beat forecasts, construction output substantially missed the consensus. Having said that, that kind of scenarios could have been expected according to PMIs. 

 Looking ahead our weekly "three pairs" post focuses on the USDJPY, EURGBP and EURCHF.

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