USD/CAD turns sideways after rallying around 1.3250
The USD/CAD pair oscillates in a narrow range after a rally around 1.3250 in the European session. Strength in the US Dollar is backed by Greenback’s fresh three-week high formed around 102.14. The Loonie asset is expected to deliver further action after guidance from United States Manufacturing PMI data. S&P500 futures extend losses in London, portraying caution among market participants ahead of key economic data. The US Dollar Index continues its three-day winning spree on Tuesday as investors expect that the Federal Reserve (Fed) could continue hiking interest rates so that price stability could be achieved quickly.
Silver price is maintaining a lower high formation
Silver price (XAG/USD) falls back swiftly after a short-lived pullback near $24.45 in the early New York session. The white metal faces a significant sell-off as the additions of fresh private payrolls in the United States labor market were higher than expectations in July. The Automatic Data Processing (ADP) agency of the US economy reported that fresh 324K individuals were recruited in July while investors were anticipating employment of 189K. Strong demand for labor by US private sector indicates that inflationary pressures could rebound ahead. This has also set a positive undertone for the Nonfarm Payrolls (NFP) data, which will be published on Friday at 12:30 GMT.
USD/MXN Hits a two-month high at 17.4256
The Mexican Peso (MXN) plunges sharply against the US Dollar (USD), accumulating losses of 2% on Thursday and 4% in the week spurred by higher US Treasury bond yields and traders beginning to unwind the carry trade. Additionally, a surprise rate cut of 50 bps by the Brazil Central Bank could be seen as setting the tone for other Latin American central banks. At the time of writing, the USD/MXN is trading at 17.3617 after hitting a daily low of 16.9800. Wall Street is trading in negative territory as investors’ mood remains depressed, courtesy in part of Fitch’s downgrade to US creditworthiness. Also, a strong US Dollar (USD) across the board underpins the USD/MXN higher, reaching a two-month-high of 17.4256 early in the North American session, as data from the United States (US) crossed the wires.
GBP/JPY Consolidates Around 181.00
The GBP/JPY pair remains back and forth around 181.00 after a recovery move from 180.50 in the London session. The asset recovered confidently as the Bank of England (BoE) raises interest rates by 25 basis points (bps) to 5.25% on Thursday. This was the 14th consecutive interest rate hike by the BoE and interest rates at 5.25% are highest in the past 15 years. BoE Governor Andrew Bailey kept the door open for further policy tightening as the victory against stubborn inflation cannot be announced now. Out of the nine-member Monetary Policy Committee (MPC), BoE policymaker Swati Dhingra favored an unchanged interest rate decision. BoE Haskel and Mann supported for 50 bps interest-rate hike.
