With stock market volatility once again on the rise, the Dollar was broadly lower as FX traders trimmed their bets against carry trade currencies. Asian equities fell earlier this morning, with the Nikkei in Japan losing 1.3%. That was followed by rough trade in Europe with the major indices, i.e. the French CAC40 and the German DAX, poised to close out August as the worst recorded month in nearly four years. Analysts point out that the risk aversion is causing headwinds for the greenback, though that may change as the focus shifts to the Federal Reserve decision.
As reported at 11:25 am (BDT) in London, the USD/JPY was trading at 121.2550 Yen, a loss of 0.28%; for the month of August the Dollar lost about 2.2% versus the Yen. Meanwhile the EUR/USD was higher at $1.1209, a gain of 0.31% for the Euro which is nearly 2.4% higher this month. The US Dollar Index was trading lower at 96.039 .DXY, a loss of 0.07% in this session, and about 1.5% lower for August. FX traders use the Dollar Index to assess the relative strength of the Dollar versus its major peers.
Data Draws Markets’ Focus
Markets will turn their focus this week to key data from the US, including business surveys, trade and the all important US Non-Farms Payroll report which will be released on Friday morning. Traders hope to be able to use the NFP figures to better gauge whether or not a rate hike for September is well and truly off the table.
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