Many currencies have been struggling for direction of late, and the euro in particular has generated a news-flow fatigue. Currency markets have been tricky to judge over the last few weeks, and it doesn’t look like that is about to change any time soon. Euro-dollar has been struggling to jump any higher than $1.1150 and, every time it does jump, we see a sell off. Friday saw a key move testing the $1.1150 level, but the rally fell short and was soon wiped out.
While other currencies have struggled for direction, dollar-Canadian dollar has been rallying strongly and shows no sign of letting up. This week sees the release of a whole host of data and, with all eyes on the Fed for more clues as to when we could see a rate hike, we could well be looking at more upside for dollar-Canadian dollar.
The Federal Open Market Committee meeting minutes are expected to show yet again that we are closer to a rate rise than the previous month, and that we will see more members starting to vote for a hike. This doesn’t necessarily mean that we will see a September hike, or that interest rates will even rise this year. But it does mean that, in the short term, the Fed will continue to talk up the chances of a hike to brace the market for the inevitable.
Tomorrow and Friday see data out of Canada and the US, and with expectations for another stellar US non-farm payroll number and a static reading on unemployment from Canada, we are looking at dollar-Canadian dollar yet again being the main port of call for currency traders trying to find some direction.
|EToro investment analyst: Mati Greenspan|
After some poor manufacturing data from China yesterday, stocks around the globe are a bit wobbly. Over the past few weeks, the Chinese stock market has been falling fast but yesterday’s data hasn’t hurt the markets too much, as prices are already considered very low.
The Greek stock market is also open for business again for the first time in five weeks. eToro analysts see this as bitter-sweet news. This drama has gone on too long but is still far from over. Yesterday saw big falls, so anyone with exposure to Greek debts should still be wary; this story is far from over.
The world’s third largest bank has just got a bit smaller. London-based HSBC has decided to cut costs by selling its operations in Brazil for a cool $5.2bn. The firm reported profits of $13.6bn for the first half of the year, much stronger than expected. Keep an eye on banking stocks for the rest of the week.