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Greenback Holds On To Minor Gains, Dollar Index Snaps Losing Streak

FOREX
  • G10 FX held narrow ranges during the second half of Monday's session, with the US out for Labour Day holiday.
  • The dollar index sits in positive territory, up 0.2%, likely to halt a six-day losing streak. The greenback firmed against most other major currencies, erasing Friday's payrolls induced losses.
  • GBP, NZD and AUD led underperformance, all retreating around 0.3%, with the Norwegian Krone bucking the trend, marginally higher on the day.
  • With EURUSD trading higher Friday on the weaker-than-forecast NFP release, the pair touched but failed to break key resistance at the Jul 30 high of 1.1909. This level remains a key hurdle for bulls and a break would strengthen bullish conditions and given the weighting, could also signal the next move lower for the dollar index. On the downside, the support to watch is 1.1735, Aug 27 low. A break would suggest the recent rally is over.
  • Overnight, markets will await the September RBA rate decision/statement. The focus will fall on the decision surrounding the Bank's yet to be implemented tapering move (to A$4bn of bond purchases/week).
  • Elsewhere, German ZEW data will be released along with potential comments from Bank of England's Saunders and Mann. Later this week, the BOC and ECB meetings are headline risk events.

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