Canadian dollar – The local dollar softened modestly on Tuesday as risk aversion stepped up gently to the plate. Crude oil futures remained rosy although the Canadian dollar showed that its fate is not based solely on the fortunes of the price of oil as it fared a mild decline to $1.0372 U.S. cents. The Canadian economic calendar is punctuated Friday by the release of the local employment report where investors will look to a slower pace of increase as a sign that the domestic economy continues to suffer the fallout of a slower growth outlook abroad.
Aussie dollar – The Reserve Bank of Australia maintained its benchmark short-rate of interest at 4.75% at its July meeting overnight and warned that growth might turn out to be less than it earlier forecast. The Aussie dollar had a hard time with the wording of the central bank’s statement and tumbled towards a loss of a penny on the day. A decline in a reading of service sector health for June also underwhelmed. For the tenth month in twelve the AiG performance of services index remained in contraction territory as domestic businesses struggled with relatively restrictive monetary condition and a strong cross current in the form of an expensive local dollar. The unit retreated to $1.0698 U.S. cents on Tuesday.
Japanese yen – The yen weakened as investors favored the dollar in an increasingly growth-challenged environment pushing its value down toward its weakest in a week. The dollar rose to as high as ¥81.19 and close to where it recently traded in New York ahead of the opening of trading on Wall Street.
Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC
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