The US Dollar resumed gains post Labor Day as risk sentiment has been further deteriorated following China’s PMI release, which showed that the services sector activity slowed in August. The yuan weakened also as the greenback hit a three-month high, with USD/CNH gaining 0.2% to 7.2920. The Aussie dollar continues to register losses after the RBA kept its key rate unchanged, trading currently at 0.6386. USD/JPY heads towards 147 and EUR/USD continues to edge lower, having crushed the 1.08 level. GBP/USD is also lower, breaking through 1.26 handle.
ECB’s Christine Lagarde failed to give an indication of the central bank’s following steps for the next meeting, at a speech she delivered in London yesterday. The main question remains whether another raise is coming or if they will pause, one of the most uncertain decisions in a yearlong battle against inflation. ECB officials will meet on the 14th of September and must reflect on whether a recent slowdown in the economy is enough to stop interest rates from rising again. Eurozone PPI, and Eurozone and Germany PPIs are due to be released today and re-assure the ECB that the economy is contracting.
In other news, Oil is trading near its 1-year high after OPEC + cut supply which led to a tightening in the market, leading WTI Crude to edge +0.4% to $85.93/bbl.
