The US dollar is the currency of choice this morning after Hawkish Fed comments sparked a surge in bets on further and faster rate hikes. This was coupled with better than expected ISM non-manufacturing PMI.
The Australian dollar has been hit hardest, with the AUD/USD plunging yesterday to below 0.7100 with follow on selling this morning.
The EUR/USD extended its losing run with heavy selling yesterday, pushing the pair below 1.1500 as pressure mounted on Italy’s budget. The EUR/GBP is also suffering after further selling yesterday. The GBP/USD has also been selling steadily, but at a more measured pace than the euro as Brexit hopes rise on Ireland’s apparent backing.
The USD/CAD is reversing Monday’s opening gap lower, with large gains yesterday and the 1.2900 level a likely target. The USD/CHF also rallied further back towards parity yesterday.
The USD/JPY surged back towards the highs yesterday, with moderate selling this morning. Other yen pairs are firmly on the back foot, with the AUD/JPY rapidly selling off. The EUR/JPY is also struggling after reaching the highs at 133.00 last week.
At 14.15, we have FOMC Member Quarles speaking.
Canadian Ivey PMI is at 15.00.
The AUD/USD continues to struggle this week, but it’s all in line with the longer term trend of a stronger dollar and pressure on Australia’s China.