Corrective Pressures Give The Greenback A Reprieve

US economic data today includes more from the seemingly rapidly recovering manufacturing sector in the form of factory goods orders and the final look at July durable goods orders. The API private sector jobs estimate will draw attention, though it has been having a difficult time during the pandemic, and back month revisions have been substantial. The market is looking for around one million jobs from ADP's estimate, and July's 167k estimate is bound to be revised higher. The Fed's Beige Book is released late in the session, and more reports suggest that the US absorbed the loss of the $600 a week in federal unemployment insurance without much impact (yet). The Fed's Williams and Mester speak before the Beige Book's release, while Daly speaks after the markets close today.  

Canada reports Q2 productivity. July's trade figures are released tomorrow, and then the August jobs report on Friday. Mexico reported another stronger worker remittances yesterday, and today's reports include the July leading economic indicator and August vehicle sales. After imploding in the first four months of the year, Mexican auto sales have been recovering, but in July, they were still off nearly a third from July 2019. In contrast, US August auto sales reported yesterday (~15.2 mln saar pace) was about 10.5% below August 2019. That said, year-to-date sales through August are around 20% below the year-ago period. 

The US dollar briefly traded below CAD1.30 for the first time since January yesterday and bounced to almost CAD1.3090 in yesterday's reversal. There has been no follow-through US dollar buying today, and it is chopping in a narrow range above CAD1.3050. Chart support is a little lower, but a consolidative North American session looks likely. The Mexican peso did experience yesterday's dollar reversal. The dollar finished yesterday, almost 0.5% weaker against the peso. It is holding now a little above yesterday's low (~MXN21.6770). The 200-day moving average is a bit below MXN21.50. Resistance is likely to be found near old support around MXN22.00.  

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Read more by Marc on his site Marc to Market.

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