Dollar Retreats Against Euro but Risk Trends Notably Absent
Dailyfx | Aug 22, 2012 07:01AM ET
The dollar was under considerable pressure Tuesday, but the currency regained its footing before the session was done. The most remarkable performance for the greenback was against the considerable strength of the euro. EURUSD managed a 1 percent rally that defied the low liquidity and volume levels that have constantly burdened traders that have awaited more from these markets. Yet, as this benchmark pair hovers at six-week highs, we have to note that the dollar managed to fought its way back from early session losses against its more risk-laden counterparts (AUDUSD leading them). In fact, looking at the Dow Jones FXCM Dollar Index (ticker = pain from a high yen .
Canadian Dollar Suffers on an Unproductive Risk Day, Carney and Data Ahead
Though we would expect the euro and pound to win ground against the Canadian dollar given the improved sentiment surrounding the Euro crisis outlook, the currency actually dropped against all of its major counterparts this past session. The shift in risk trends added to the loonie’s problems Tuesday, but the performance relative to the Aussie and Kiwi doesn’t borrow from larger themes and suggests there the Canadian currency itself is showing weakness. From the docket, only the modest 0.1 percent slip in wholesale sales (a volatile reading) and comments from the BoC Deputy Governor Cote that the bank does stress tests on households and lenders were noteworthy. Coming up, we have far more direct fundamental developments: June retail sales and BoC Governor Carney speaking on the state of the Canadian economy.
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