USD 
EUR 
GBP 
JPY
It's been a wild day, with the Kansas Fed Manufacturing Index and Composite Index both coming in strong, which was pretty wild considering the market was expecting a slowdown. But what really caught my attention was Fed's Goolsbee comments on inflation - he's not a voter this year, but he's definitely leaning on the hawk side, and that's got people talking. If you were watching EUR/USD, you'd have noticed it didn't really react much to the Consumer Confidence data out of Europe, but that's because the focus is all on the US right now.
And that's exactly what's happening - the US dollar is dominating trading, with both the Euro and Sterling down about 0.9% against the greenback since mid-May, according to Georgette Boele at ABN AMRO. But what's driving this move? It's not just the strong data out of the US, it's also the energy markets and bond yields, which are all pointing to a stronger dollar. You'd have noticed that GBP/USD pulled back from its session highs of about 1.3458 to trade at around 1.3412, which isn't a huge move, but it's still a move down. And as for AUD/GBP, it's still trading around 0.5323, which is pretty flat, but honestly surprising given the weakness in the Aussie lately.
But back to the US dollar - it's not just the Euro and Sterling that are feeling the pain, the New Zealand dollar is also down, trading around 0.4372 against the pound. And if you look at the USD/JPY, it's trading around 159.00, which is pretty interesting, given that Brown Brothers Harriman's Elias Haddad thinks it should stay below 160.00 due to intervention risks and a more hawkish Bank of Japan. According to ForexLive, the prior Kansas Fed Composite Index was +10, and the new one is +8, which isn't a huge drop, but it's still a drop. And prior to that, manufacturing activity was increasing in the tenth district, while expectations for future activity grew slightly from last month.
So what's coming next? Well, it's hard to say, but one thing's for sure - the market is going to be keeping a close eye on those inflation numbers, and if they keep coming in hot, we could see the dollar keep on strengthening. FXStreet pointed out that raw materials prices are still a concern, and that's going to be a key factor in the Fed's decision-making process. And as for now, the British Pound is trading at 1.3412 against the US dollar, the Australian dollar is at 0.5323 against the pound, and the Euro is at 1.5989 against the Canadian dollar. It's going to be an interesting few days, that's for sure.
Dollar Dominates Trading
And that's exactly what's happening - the US dollar is dominating trading, with both the Euro and Sterling down about 0.9% against the greenback since mid-May, according to Georgette Boele at ABN AMRO. But what's driving this move? It's not just the strong data out of the US, it's also the energy markets and bond yields, which are all pointing to a stronger dollar. You'd have noticed that GBP/USD pulled back from its session highs of about 1.3458 to trade at around 1.3412, which isn't a huge move, but it's still a move down. And as for AUD/GBP, it's still trading around 0.5323, which is pretty flat, but honestly surprising given the weakness in the Aussie lately.
But back to the US dollar - it's not just the Euro and Sterling that are feeling the pain, the New Zealand dollar is also down, trading around 0.4372 against the pound. And if you look at the USD/JPY, it's trading around 159.00, which is pretty interesting, given that Brown Brothers Harriman's Elias Haddad thinks it should stay below 160.00 due to intervention risks and a more hawkish Bank of Japan. According to ForexLive, the prior Kansas Fed Composite Index was +10, and the new one is +8, which isn't a huge drop, but it's still a drop. And prior to that, manufacturing activity was increasing in the tenth district, while expectations for future activity grew slightly from last month.
So what's coming next? Well, it's hard to say, but one thing's for sure - the market is going to be keeping a close eye on those inflation numbers, and if they keep coming in hot, we could see the dollar keep on strengthening. FXStreet pointed out that raw materials prices are still a concern, and that's going to be a key factor in the Fed's decision-making process. And as for now, the British Pound is trading at 1.3412 against the US dollar, the Australian dollar is at 0.5323 against the pound, and the Euro is at 1.5989 against the Canadian dollar. It's going to be an interesting few days, that's for sure.