Forex today: dollar higher later in the session, mixed markets and outlook

Forex today was fickle towards the dollar that ranged between 91.9880 and 92.3750, closing the day up +0.02% at 92.2720. The US 10-year benchmark yield was up +2.01% at 2.1011 close of play.

The markets were steered along by a number of fundamentals, from resignations at the Fed, positive developments in the Whitehouse, improved US data and a surprise rate hike by the BoC. 

The greenback was pressured after Fed Vice Chair Fischer (centrist) who resigned. In a letter to President Donald Trump, the former Bank of Israel chief said he would leave around October 13 for “personal reasons”, which he did not elaborate on. However, it comes as the Fed faces a host of vacancies at its most senior levels and as a proponent of reducing the balance sheet, September's meeting could well be passing up on what was promised in the last set of the FOMC minutes, weighing on the dollar. 

Later in the day though, the dollar spiked when news hit the wires that Trump and his congressional leaders appeared to have agreed upon on temporary debt ceiling through to December 15th that will include funding for the damages caused by the recent weather storms devastating Texas and now the Carribean with Hurricane Irma headed towards Florida.

The BoC's interest rate hike was a surprise to markets and sent the Loonie sky rocketing as the divergence between the Fed and BoC nets out. USD/CAD was -1.23%. The Aussie closed just +0.03% supported by strong copper again. The Kiwi was lower by 0.48%. The Euro was 0.05% in the green, Sterling 0.09% higher and the Yen was down -0.42%.

Key events in the Asia session

Analysts at Westpac offered their outlook for the key events in Asia today:

"Australia: Jul retail sales are expected by Westpac and the market to rise 0.2%. Q2 saw a rebound from a weather affected Q1 but the momentum is now fading as the consumer sentiment backdrop remains shaky. Jul trade balance is expected to be +0.9bn. Westpac forecasts a greater surplus of 1.4bn with a lift in commodity prices boosting exports while imports decline on a higher AUD."

Key notes

• Trump sides with democrats on interim debt-limit fix - Bloomberg
• US ISM Non-manufacturing: Momentum picks up - Wells Fargo
• BoC hikes rates with a somewhat cautious statement - Wells Fargo
• Fed's Beige Book: Prices rose modestly overall across the country
• Further softening of Fed tightening expectations - BBH