Support for both NZD and AUD, NZD winning on the cross rate; Iraq boosts crude exports, oil price down 3%; US inflation close to target and employment strong

By Kymberly Martin

Most currencies trade not far from yesterday morning’s levels. The outliers have been the CAD which has underperformed and the GBP which has gained versus the USD.

Yesterday morning the USD was on the front foot following comments by Fed Vice-Chairman Fischer. He said US core inflation was within “hailing distance” of the 2% target, while employment had increased “impressively” since its nadir in 2010.

Otherwise it was a fairly quiet start to the week. There was little on the data agenda and equities were relatively flat.

However, the WTI oil price made a notable move. It has declined by almost 3% since the start of the week. The move came as Iraq has announced it will boost its crude exports against the backdrop of global oversupply. The decline weighed on the CAD.

It has been the worst performing currency, down almost 0.7% versus the USD. The USD/CAD now trades at 1.2950.

The GBP enjoyed a rare moment as the best performing currency overnight. From evening lows near 1.3040, the GBP/USD now trades at 1.3130.

The AUD and NZD have both traded higher from last evening. However, on the cross the NZD has outperformed. This has taken the NZD/AUD from evening lows of 0.9500 up to 0.9540 currently. Near-term resistance remains at the early-August highs near 0.9570, ahead of 0.9600.

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