This morning, the dollar remains soft, falling further after US Treasury secretary Steve Mnuchin affirmed the government’s support for a weaker dollar: “A weaker dollar is good for us as it relates to trade and opportunities”.
The dollar experienced a broad-based selloff, led by the British pound that continues to climb despite sub par climate count change data yesterday. With average earnings and the unemployment rate holding steady though, analysts continue to bet on future rate hikes. The GBP/USD is up over 3% on the week to date.
The pound continues to outpace the euro, with the EUR/GBP set to challenge the summer lows. The EUR/USD climbed yesterday and this morning, but at a slower pace after European manufacturing data came in below estimates yesterday. Traders are also keeping their powder dry ahead of today’s ECB meeting.
The AUD/USD is powering higher and has just pulled back from threatening the September 2017 highs. The NZD/USD also continues to impress.
The USD/CHF is worth a mention for its progress lower, with the pair hitting its lowest levels since August 2016.
The yen continues to strengthen against the dollar, keeping a lid on yen pair gains this week. The USD/JPY has maintained its downtrend though.
Today, we have the ECB minimum bid rate at 12.45 with no change expected. The press conference follows at 13.30.
Also at 13.30, we have Canadian retail sales and US unemployment claims.
US new home sales follow at 15.00.
The USD/JPY continues to slip lower this morning as money flows from the dollar to the yen.
With the dollar weakness showing no obvious signs of abating, it could pay to bet on more downside from here.