Here’s what’s happening on Wednesday, August 20th:
The pound is maintaining its ground after a couple of days of decline, as market participants examine the UK’s inflation figures from July. Later in the US trading session, the Federal Reserve is set to release the minutes from its meetings on July 29th to 30th. Additionally, several Fed officials will deliver speeches throughout the day.
This week’s US Dollar Price
The following table outlines the week’s performance of the US dollar (USD) against various currencies. This week, the USD has shown the strongest performance against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.67% | 0.44% | 0.13% | 0.40% | 1.02% | 1.62% | 0.32% | |
| EUR | -0.67% | -0.23% | -0.55% | -0.27% | 0.36% | 0.91% | -0.35% | |
| GBP | -0.44% | 0.23% | -0.42% | -0.04% | 0.59% | 1.14% | -0.16% | |
| JPY | -0.13% | 0.55% | 0.42% | 0.29% | 0.90% | 1.51% | 0.19% | |
| CAD | -0.40% | 0.27% | 0.04% | -0.29% | 0.59% | 1.22% | -0.12% | |
| AUD | -1.02% | -0.36% | -0.59% | -0.90% | -0.59% | 0.55% | -0.75% | |
| NZD | -1.62% | -0.91% | -1.14% | -1.51% | -1.22% | -0.55% | -1.31% | |
| CHF | -0.32% | 0.35% | 0.16% | -0.19% | 0.12% | 0.75% | 1.31% |
The heatmap illustrates the changes in major currencies against each other. The base currency is on the left, and the estimated currency is across the top. For example, selecting US dollars down the left and moving horizontally to Japanese Yen shows the comparison rate in the respective box.
The Reserve Bank of New Zealand (RBNZ) revealed early Wednesday that it has lowered its rate by 25 basis points (BPS) to 3%, as anticipated. Some policymakers indicated a preference for a reduction of 50 BPS, suggesting there might be further rate cuts if mid-term inflation remains under control. Acting RBNZ Governor Christian Hawksby expressed satisfaction with the decline of the New Zealand Dollar (NZD), which has been under significant selling pressure, trading weakly below 0.5850, losing over 1% daily.
In the UK, the National Statistics Agency reported that the Consumer Price Index (CPI) increased by 3.8% year-on-year in July, surpassing the expected 3.7% and up from June’s 3.6%. Core CPI also increased by 3.8% during this time. Monthly CPI rose by 0.1%, against predictions of a 0.1% drop. Following the inflation report, GBP/USD climbed slightly above 1.3500 after hitting daily lows.
The US Dollar index remains steady above 98.00, after two days of positive closing. In the early European session, US stock index futures have declined by 0.3% to 0.4%, reflecting a cautious market outlook. A 20-year memo auction by the US Treasury is also set for later today.
EUR/USD is facing difficulties trying to recover, trading below 1.1650, with Eurostat set to revise July’s inflation data later today.
In Canada, annual inflation, as measured by the CPI, dipped from 1.8% in June to 1.7% in July, according to Statistics Canada. After increasing about 0.5% on Tuesday, USD/CAD was fluctuating tightly around 1.3850 early Wednesday.
Data from Japan indicated a 3% rise in monthly machine orders in June, exceeding expectations and marking a significant recovery from a 1% decline. However, both exports and imports fell by 2.6% and 7.5% respectively year-on-year in July. USD/JPY appears weak during the European sessions, trading below 147.50.
Gold prices dropped over 0.5% on Tuesday, hitting their lowest close since August 1st. XAU/USD showed a slight uptick early on Wednesday, trading mildly above $3,320.
