Aussie dollar a little weaker as USD gains

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The Australian dollar is a little weaker today. At 0.7807 the Aussie is off 0.14% this morning but off the lows of the past 24 hours at 0.7797. Copper was higher, as was iron ore. Risk assets are higher and investor risk appetite looks healthy. Yet the Aussie dollar is a little lower over the past two trading sessions. Certainly, that’s in large part as a result of the US dollar’s move. But it is interesting nonetheless.

The US dollar is gaining traction as traders reprice a hawkish US Fed and perhaps take a little short US dollar positioning off the table in the run-up to this week’s ECB and BoC meetings – among others. It remains the case for the moment however that the US dollar – whether in DXY terms or against the Euro – has still not broken recent ranges. But a break of 94.25 in the DXY and 1.1660 for the Euro would be a signal that the next leg of the US dollar’s recovery has begun.

Uncertainty weighs on the Euro

Looking at the Euro specifically it’s been an interesting down day as separatist tensions in Catalonia have continued and the votes in northern Italy over the weekend have highlighted that many regions of the Eurozone would like more autonomy and self-government. It’s not the existential threat to the EU that the French election posed earlier this year. But uncertainty in any form often weighs. Especially when it’s a convenient excuse to buy dollars at a time it’s on the rise anyway. As I said above 1.1660 is the key for the Euro.

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USDJPY climbed to 114 at one point. But it’s back at 113.36 this morning actually down slightly – 0.1% – on the day. GBPUSD is up 0.1% at 1.32 as competing forces of weak data and a little more positivity about the Brexit process have the Sterling bulls and bears at a standstill. The fact the pound has gained 0.34% against the Euro though is worth noting. EURGBP is at 0.8899.

Canadian dollar still weak as the Kiwi recovers a bit

On the commodity bloc, the Canadian dollar continues its pre-BoC weakness and is down 0.15% with USDCAD up at 1.2642. The Kiwi stabilised over the past 24 hours. After falling to a low of 0.6933 yesterday it is sitting at 0.6969 this morning up 0.1%.

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