The dollar index is building on Wednesday’s surge, with further gains causing dollar pairs to plunge.
The AUD/USD sunk to just above 0.7100, with follow on selling taking the pair below that marker this morning. Lowe’s warnings of lower rates to come are continuing to have an impact. The AUD/JPY also sharply hit reverse gear, sitting just above 78.00.
The EUR/USD has seen similar, if less spectacular selling over the last 48 hours, capping a week of losses to trade around 1.1360. The GBP/USD is unchanged however this morning, holding up well despite renewed Brexit spats. The EUR/GBP is slipping back for the second straight day, holding below 0.8800.
The USD/CAD has been caught in the commodity rout, with the buyers in force yesterday and follow-on buying this morning. The USD/CHF has smashed through the parity line to trade at 1.0025 for the first time since early December.
The yen is balancing off against the dollar this morning, as it has done for the previous two days. The USD/JPY is unchanged, with the EUR/JPY is down for the third straight day, with the GBP/JPY slipping lower to test 142.00.
At 10.00, we have EU economic forecasts.
At 12.00, we have the MPC official rate statement, released alongside the Bank of England inflation report. BOE governor Carney speaks at 12.30.
FOMC member Clarida speaks at 14.30.
The Aussie plunge could have further to run as the ramifications of the rate cut warning set in.