FX Update – August 11 – Risk On Vibe?

<h3>USDIndex, Daily</h3>
<p>The narrow trade-weighted <strong>USDIndex</strong> edged out a one-week high at <span><strong>93.71</strong></span>, making this the third consecutive trading day a higher high has been seen. A softer tone in the Euro has in part given buoyancy to the index while pushing <strong>EURUSD</strong> to a one-week low, at <span><strong>1.1723</strong></span>. <strong>EURJPY</strong> concurrently rose about 40 pips to a peak at <span><strong>124.75</strong></span>. <strong>USDJPY</strong> remained firm, but remained just shy of the one-week high seen yesterday at <strong>106.21</strong>. <strong>AUDUSD</strong> ebbed back under <span><strong>0.7150</strong></span>, leaving highs at 0.7185/86, though still remained net higher on the day, while <strong>AUDJPY</strong> pegged a four-day high. <strong>USDCAD</strong> ebbed to a four-day low at <span><strong>1.3320</strong></span>, reflecting a modest degree of outperformance in the Canadian Dollar, which has been concomitant with oil prices edging out new highs. Front-month <strong>USOil</strong> futures printed a one-week high at <span><strong>$42.40</strong></span>.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/08/2020-08-11_10-55-52.png"><img class=" wp-image-159055 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/08/2020-08-11_10-55-52-300×252.png" alt="" width="564" height="474" srcset="/wp-content/uploads/2020/08/2020-08-11_10-55-52-300×252.png 300w, /wp-content/uploads/2020/08/2020-08-11_10-55-52-500×420.png 500w, /wp-content/uploads/2020/08/2020-08-11_10-55-52.png 685w" sizes="(max-width: 564px) 100vw, 564px" /></a></p>
<p>Is the the Dollar etching out a recovery phase after recent out-performance and seven consecutive weeks of lows the wake of the July US jobs report, hopes of a new stimulus package and with new coronavirus cases now dropping sharply across the sun states?</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/08/2020-08-11_10-59-24.png"><img class=" wp-image-159065 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/08/2020-08-11_10-59-24-300×250.png" alt="" width="577" height="480" srcset="/wp-content/uploads/2020/08/2020-08-11_10-59-24-300×250.png 300w, /wp-content/uploads/2020/08/2020-08-11_10-59-24-504×420.png 504w, /wp-content/uploads/2020/08/2020-08-11_10-59-24.png 686w" sizes="(max-width: 577px) 100vw, 577px" /></a></p>
<p>UK jobs data provided very mixed and confusing reading. The claimant count jumped 94,400 in July, bringing the claimant count rate to a whopping 7.5%, from 7.2% in the previous month. The less timely ILO unemployment rate unexpectedly held steady at 3.9% in the three months to June, but at the same time employment dropped -220K during that period. This was the biggest rise in over a decade highlighting the impact of lockdown measures. Still, it is less than Bloomberg consensus expectations predicted and ties in with the general theme of “not as bad as feared” – with regard to the initial impact of virus measures. The question of course is what will happen when governments have scrapped support measures and the furlough scheme runs its course. <strong>Cable</strong> was capped at <strong><span>1.3100</span></strong> yesterday, before slipping to <strong><span>1.3055</span></strong> following the claimant data, and has since recovered over today’s pivot point (1.3060) to trade at <strong><span>1.3075</span></strong>.</p>
<p>Next up today is the German and Eurozone ZEW Economic Sentiment index at 09:00 GMT.</p>
<p><strong>Click </strong><a href="https://www.hotforex.com/en/trading-tools/economic-calendar.html"><strong>here</strong></a><strong> to access the HotForex Economic Calendar</strong></p>
<p><strong>Stuart Cowell</strong></p>
<p><strong>Head Market Analyst</strong></p>
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