Debt-wrangling contains dollar

Aussie dollar – The Aussie remained above $1.1000 using the move to record-high territory as support for a second session. The local dollar had no domestic data to fuel a further rally but interest rate markets have recently shrugged off expectations of a reduction in the short-term lending rate set by the central bank on account of an increase in consumer prices during the second quarter. The Aussie nevertheless dipped to ¥85.73.

Canadian dollar – U.S. debt negotiations boosted the greenback midweek and pulling the U.S. unit back from the brink of its weakest level against the Canadian dollar since 2008. A resurgence of risk appetite on Thursday has helped buoy the so-called loonie lifting it to $1.0525 U.S. cents. The Canadian dollar continues to find support as optimists believe that behind the debt-clouded horizon stands the promise of a resumption of monetary tightening at the Bank of Canada. The dollar is firmer this morning ahead of a report due Friday likely to show a resumption of monthly growth during May following an April-time contraction.

British pound – The pound is unchanged despite a volatile session during which it jumped by more than a half-cent before falling by the same amount around its midweek close of $1.6328. The pound rose against the euro is a better European alternative and trades at 87.60 pence per euro. The pound was jolted by a slide in fortunes at retailers in June as reported by the CBI. Sales slumped to an index of negative five from a previous negative two as crimped consumers bought less groceries and home improvement items. The CBI noted a rapid drop in durable goods sold.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

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About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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