USD 

The dollar remained in a weak spot due to the fallout from Trump’s response to the violence in Charlottesville.

Economic data also turned out mixed, leaving some doubts on the Fed’s ability to hike again in September. This was emphasized by FOMC member Kaplan who spoke about the slack in the labor market and the need to exercise more patience in waiting for stronger inflation before tightening. Another speech by Kaplan is scheduled, along with the release of the preliminary UoM consumer sentiment index. 

EUR 

The euro tumbled against its peers after the ECB minutes were released as these didn’t contain much conviction on tapering as many expected. To add to that, the terror attack in Barcelona weighed heavily on risk-taking and investor sentiment. In terms of data, final CPI readings from the region were unchanged at 1.3% for the headline figure and 1.2% for the core version. 

GBP 

The pound resumed its drop against some of its rivals even after the UK reported stronger than expected retail sales. Consumer spending ticked 0.3% higher versus the projected 0.2% increase. There are no reports due from the UK for the rest of the week. 

CHF 

The franc was able to take advantage of risk aversion as traders were hesitant to buy up the dollar anyway. There were no reports out of the Swiss economy and none are due today so market sentiment could continue to prop the Swiss currency up or profit-taking could ensue. 

JPY 

The yen was able to rake in plenty of gains on the BOJ’s JGB trimming and the pickup in risk-taking. Japan’s trade balance also turned out stronger than expected at a surplus of 0.34 trillion JPY. CPI readings are due next and a strong batch could fuel expectations of another reduction in purchases of bonds by the central bank. 

Commodity Currencies (AUD, NZD, CAD) 

The comdolls were badly hit by the return in risk aversion in the past sessions, spurred by a terror attack in Barcelona and political risks in the US. Australia reported a higher than expected 27.9K rise in employment versus the projected 19.8K gain while the earlier figure was upgraded to 20K. Canada is set to print its CPI figures next and strong readings could keep traders expecting another BOC hike. 

By Kate Curtis from Trader’s Way