US Dollar Mixed Ahead of Consumer Data
The US dollar fell against its major trading partners early Friday, except for a gain versus the yen, with the focus on personal income, spending and price data for July.
The dollar does not appear in a position to trade much lower in the very near term, ING said in a note. The market’s conviction on a Fed easing led to its own dovish tilt in communication by many weeks, and the largest chuck of the dollar decline has probably already happened.
Personal income, spending and PCE price data are schedule to be released. Core prices, watched closely by the Federal Reserve, are forecast to rise by 0.2% from June and 2.7% from a year ago, slightly faster than the 2.6% rate in the previous month.
The Chicago purchasing managers’ index for August is due to be released, the last regional conditions readings before the Institute for Supply Management’s manufacturing index is published Sept. 3.
The final consumer sentiment reading for August is due to be released after the preliminary reading released on Aug. 15 showed a modest improvement overall due to a more optimistic outlook that offset increased concerns about the current situation.
A quick summary of foreign exchange activity heading into Friday showed that USDEUR rose to 1.1079 from 1.1076 at the Thursday US close but was below a level of 1.1098 at the same time Thursday morning.
Eurozone consumer prices rose in August after a flat reading in July while core prices rebounded from a July decline, but year-over-year rates slowed, data released earlier Friday showed.
European Central Bank policy board member Isabel Schnabel said overnight that the ECB needs to be cautious when lowering rates but noted that further rate cuts should not impact the slowing of inflation, according to Reuters.
The next ECB meeting is scheduled for Sept. 12. GBPUSD rose to 1.3178 from 1.3166 at the Thursday US close but was below a level of 1.3198 at the same time Thursday morning.
UK home prices declined in August, though the year-over-year rate accelerated, while mortgage lending increased in July, according to data released earlier Friday. The next Bank of England meeting is scheduled for Sept. 19.
USDJPY rose to 145.2971 from 144.9191 at the Thursday US close and 144.5778 at the same time Thursday morning. Tokyo’s consumer price inflation, an early indicator of the overall Japanese consumer price index, accelerated in August, while Japanese industrial production rebounded in July and the unemployment rate ticked up, data released overnight showed. The next Bank of Japan meeting is scheduled for Sept. 19-20.
USDCAD fell to 1.3477 from 1.3486 at the Thursday US close but was above a level of 1.3456 at the same time Thursday morning. Canada GDP for July and Q2 are due for release followed by Canadian budget data for June. The next Bank of Canada meeting is scheduled for Sept. 4. #US Dollar Mixed Ahead of Consumer Data
