__cfduid
Valid: 29 days
It helps us protect the website from threats such as hacker attacks. Used by Cloudflare to recognise trusted network traffic.
__lc_cid
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
__lc_cst
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
rc::a
Valid: It does not expire
Cookies to correctly distinguish between human and bot-generated traffic.
rc::b
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
rc::c
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
NID
Valid: 6 months
Records a unique number to recognise the device you are using. It is used for advertising.
_ga
Valid: 2 years
Registers a unique user number to collect statistical data about how you use our website.
_gat
Valid: 1 day
Used by Google Analytics to reduce queries. Reduces the amount of statistical data collected.
_gid
Valid: 1 day
Registers a unique user number to collect statistical data about how you use our website.
yt-player-bandwidth
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
yt-player-headers-readable
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
The US currency is gaining value. Weaker than expected retail sales in the eurozone, the Italian debt sell-off and multi-year low PMI from the Spanish services were negative messages for the common currency. The zloty remains stable despite further pressure on the Chinese RMB.
The most important macro data (CET - Central European Time). Surveys of macro data are based on information from Bloomberg unless noted otherwise.
Further dollar appreciation
The US currency is continuing its appreciation move. The EUR/USD during early trading in Europe dropped to 1,1560 level. A stronger dollar is both a result of broadening trade dispute and more worrying readings from the eurozone.
Risks are rising that 25 percent tariffs on the Chinese goods valued 200 billion dollars will be introduced. Wilbur Ross, the US trade secretary, said on Fox Business that “We have to create a situation where it’s more painful for them to continue their bad practices than to reform it”. It is a direct comment to China which, according to the US, violates intellectual property rights and forces technology transfers.
Ross also doesn’t like that China uses retaliatory measures instead of changing its behavior. “So the president now feels that it’s potentially time to put more pressure on in order to modify their behavior” stressed one of the leading members in Donald Trump administration.
Consequences of further tensions between Beijing and Washington is further pressure on the RMB. The USD/CNY briefly touched 6,9 level which was the lowest level RMB-USD valuation for more than a year.
Issues in the eurozone
Fears are rising concerning some of the common currency economies. Today the 10-year Italian yields exceeded 3.00 percent level. It is a result of conflict between the finance minister and leaders of the parties which won this year election. Talks are ongoing how to address budget issues regarding tax cuts and guaranteed income. The budget project is set to be announced in September but it is possible that some scope of this will be known as early as today.
Not many positive things can be said about the eurozone PMI readings. Besides Germany, the publications were fairly weak and suggest that the GDP reading will rise 0,3% this quarters matching already fragile Q2 data. Additionally, services PMI from Spain dropped to the lowest level since November 2013. However looking at both major peripheral economies (Spain and Italy) still the former looks better than the later.
The resilient zloty
Another day and another good performance of the Polish currency. Usually sensitive to the external issues zloty (strong dollar, trade tensions) has been resilient. It is still worth noting that the PLN benefits from fewer fears concerning trade disputes between the US and the EU. Local economy performance seems also to be helping as the first move on rates will rather be a hike than a decrease.
In the afternoon the US Labour Department data is set to hit the wire. The most important reading is wages (market consensus – 2.7% y/y and 0.3% m/m). Higher than expected pay rises may somewhat boost the dollar but concerning the zloty’s solid performance risks that the EUR/PLN will exceed 4,30 level and the USD/PLN markedly increase above 3.70 mark remain limited.
Subscribe to our currency newsletter
See also:
The Bank of England surprised the market (Afternoon analysis 02.08.2018)
Strong dollar, lira slump (Daily analysis 1.08.2018)
Polish zloty in good condition (Afternoon analysis 1.08.2018)
The zloty remains strong (Afternoon analysis 30.07.2018)
Attractive exchange rates of 28 currencies
Live rates.
Update: 30s
Open your free account today
Save your time and money. Create an account for free and discover how much you can gain. Join us today, and start using attractive currency services.
Create free account