Wednesday Currency Round Up

In a quick round up US dollar index traded on a mixed note after US housing data came in lower than expectations and is currently trading at 96.88. The euro depreciated in yesterday’s session to trade at 1.1048 and remains in this range in the Asian session on Wednesday continuing its downward trend before the FOMC minutes today. Euro traded flat yesterday as investors refrained from making any new trades owing to cautiousness in the market ahead of the release of FOMC Meeting Minutes so as to take cues on the timing of rate hike. Lack of economic data from the nation kept the trading volumes light. Despite positive developments on the Greek front, investors focused on the turmoil in Chinese markets that has created jitters globally prompting them to refrain from making any new risky bets. This acted as a negative factor for the shared currency

The Great British Pound appreciated considerably to trade at 1.5675 after the series of positive inflation releases yesterday. The pound is holding at 1.5667 in the morning session.  Sterling strengthened by 0.01 percent yesterday in spite of weak trading in other major currencies owing to robust release of inflation data from the nation that showed rise in CPI thereby inviting speculation over when Bank of England (BoE) policymakers will start raising interest rates.

UK’s Consumer Price Index for the month of July increased to 0.1 percent from 0.0 percent in June. Producer Price Index for the month of July came at -0.9 percent from -1.8 percent in June.

The Yen is trading at 124.26, on a mixed to positive note after trade data released this morning indicated a slowdown in exports. The Japanese Yen appreciated by 0.04 percent yesterday owing to turbulence caused in the global markets due to instability seen in the Chinese economy. This prompted the traders to refrain from making any risky bets thereby boosting the demand for safe-haven assets i.e. the Japanese Yen. Japan’s Trade Deficit for the month of July widens to 0.37T from 0.28T in June.

Asian markets are trading on a negative note owing to a 6.0 percent drop in Chinese shares that has infused fear in the market about the economic stability of China. Moreover, disappointing performance on the Wall Street along with plunge in copper prices added further pressure.

The Aussie and the kiwi tumbled hard in the morning session to trade at 0.7328 and 0.6579 respectively. The kiwi showed little response to a jump in dairy prices as both commodity currencies were pressured by the global decline in commodity prices primarily metals which are trading near bottom levels.