Forex today: dollar retains 93 handle, commodity bloc worst performer

Forex today was a little friendlier to the US dollar, despite a further drop in US ten years. -1.79% at 2.2532% currently. Th DXY is up +0.21% at 93.06.

The data in the US was mixed but the PCE index was supportive to the greenback with an annual growth of 1.4%. The core data arrived at 1.5% beating the expected 1.3% and in line with the previous. ISM manufacturing PMI for July was lower at 56.3 from previous the 57.8 and US personal spending decreased by 0.1% for the month of June with flat incomes. Overall, a benign outcome ahead of key data tomorrow and Friday in US jobs updates. 

There was some activity in oil today with a drop of 3% due to lower OPEC production surveys. Commodity currencies did not perform well as a result and the Aussie was pressured with a correction in the metals as well. AUD continued to suffer the overnight supply post RBA meeting and fell to a low of 0.7960. The Kiwi made a low of 0.7461. USD/CAD perked up with a bid through and onto the 1.25 handle with a high of 1.2547. Sterling was less firm on 1.32 but supported due to better PMI's from the UK. GBP/USD trades with a bearish bias into early Asia. The yen benefits from the political uncertainty in both the US and Japan as a safe haven but USD/JPY inched higher today regaining ground on the 110 handle. 

Key events in Asia today

Analysts at Westpac offered a preview of the key events for Asia today:

"NZ: After a disappointing GDT auction, attention will shift to the 2Q labour report with consensus looking for +0.7%q/q employment and 4.8% unemployment (WBC 4.9%). The lack of wage growth is a global phenomenon and so wage levels will be scrutinised too. 
July house price data is released prior to NZ markets’ open.

Australia: Interest may focus upon Friday’s SoMP and its forecast profiles, but building approvals have been particularly volatile (June expected +1.0% m/m, after May fell -5.6%), with June trade and retail sales also released at the end of this week. "

Key notes from US shift

• White House: Trump administration believes important to raise debt ceiling as soon as possible
• US: ISM Manufacturing signals for continued strength - Wells Fargo
• US Income and Spending: Second quarter ends on a low note - Wells Fargo