Foreign exchange trading reminder on September 9: Bank of Canada stayed on hold, the US dollar rose for three consecutive days and the Canadian dollar fell. Pay attention to the European Bank’s resolution
The U.S. dollar rose for the third consecutive day on September 8 and hit 92.86 in the intraday session, the highest level since August 27. As U.S. stocks continued their decline and demand for risky assets cooled; the Canadian dollar fell, and the Bank of Canada maintained its key interest rate at a historically low level. , The pace of bond purchases remains unchanged. The European Central Bank will announce its interest rate decision on Thursday.

On Wednesday (September 8), the U.S. dollar index gave up part of its gains, as a Federal Reserve official issued a dovish economic outlook, which led to a fall in U.S. bond yields and the European Central Bank will make a policy decision on Thursday. As U.S. Treasury yields fell, commodity currencies narrowed their declines.
The US dollar rose 0.18% to 92.71, having previously risen to 92.86, the highest level since August 27. New York Fed President Williams said that more progress is needed in the labor market to achieve "further substantive progress" in the U.S. Union's largest employment goal. But he added that if the economy continues to improve, it may be appropriate for the Fed to start slowing down its asset purchases later this year.
In addition, the Federal Reserve reported on Wednesday that the U.S. economy "slightly slowed down" in August, and the number of new crown cases once again surged to hit the catering, tourism and tourism industries. Data released on Wednesday showed that the number of job vacancies in the United States increased to nearly 11 million in July.
Edward Moya, senior market analyst at OANDA, said that the Fed will obviously be on the sidelines in the coming months to observe how the economy is going. Fed Chairman Williams made some dovish remarks in support of the idea that the Fed may reduce its bond purchases as early as December.
Mark McCormick, head of global foreign exchange strategy at Dominion Bank, released a report on Wednesday that the U.S. dollar has recently bottomed and moved higher, and is currently concerned about the 50% retracement of late summer trends.
The US dollar rose 0.35% to the Canadian dollar to 1.2691; the Canadian dollar’s one-month risk reversal indicator rose to its highest level since May 2020; the Bank of Canada maintained its key interest rate at a historically low level and the pace of bond purchases remained unchanged. The market is worried that the global economic outlook is deteriorating, even though the Bank of Canada believes that the domestic economy has come out of a weak stage.
The U.S. dollar fell 0.03% to 110.25 against the Japanese yen, and rose 0.2% earlier;
The euro to dollar fell by 0.20% to 1.1816, with solid buying above 1.1800; the euro against the Swiss franc briefly broke through the 200-day moving average after the Swiss National Bank Deputy Governor Fritz Zurbruegg said that the central bank will continue to implement expansionary monetary policy.
The European Central Bank’s governing board and the governor of the Austrian Central Bank, Robert Holzmann, wrote in Eurofi Magazine on Wednesday that the European Central Bank may tighten its policy sooner than many people expected because inflationary pressures may continue. Analysts predict that the European Central Bank’s Pandemic Emergency Asset Purchase Program (PEPP) debt purchase scale may fall from the current 80 billion euros per month to a minimum of 60 billion euros, and will decline further early next year. The plan will end in March next year. .
The pound fell 0.11% to 1.3771 against the US dollar, shrinking losses after hitting a one-week low. The pound fell after the British government announced on Tuesday that it would increase taxes to fund medical expenditures and social security.
The Australian dollar fell 0.28% to 0.7365 against the US dollar, and the New Zealand dollar was basically flat against the US dollar.
Thursday preview
time | area | index | The former value | Predictive value |
09:30 | China | August CPI annual rate (%) | 1 | 1 |
09:30 | China | August PPI annual rate (%) | 9 | 9 |
14:00 | Germany | Unadjusted trade account in July (100 million euros) | 163 | 146 |
16:00 | China | Social financing scale in August-single month (100 million yuan) (9/9-9/15) | 10600 | 28000 |
16:00 | China | Annual rate of M2 money supply in August (%) (9/9-9/15) | 8.3 | 8.4 |
20:30 | America | As of September 4, the number of people claiming unemployment benefits at the beginning of the week (10,000) | 34 | 33.5 |
20:30 | America | As of the week of August 28, the number of people claiming unemployment benefits (10,000) | 274.8 | 273 |
23:00 | America | Changes in EIA crude oil inventories in the week ending September 3 (10,000 barrels) | -716.9 | -600 |
23:00 | America | Changes in EIA refined oil inventories in the week ending September 3 (10,000 barrels) | -173.2 | -375 |
23:00 | America | Changes in EIA gasoline inventories as of the week of September 3 (10,000 barrels) | 129 | -365 |
19:45 European Central Bank announces interest rate decision
20:30 European Central Bank President Lagarde held a press conference
23:05 Speech at an online meeting of the FOMC voting committee and San Francisco Fed Chairman Daley Brookings in 2021
Summary of Institutional Views
TD Securities: The European Central Bank's interest rate decision on Thursday is expected to support the euro
As the European Central Bank may announce at its policy meeting on Thursday that it will reduce the pace of large-scale bond purchases in the fourth quarter, the euro may rise. Mark McCormick, a foreign exchange strategist at TD Securities, said that the European Central Bank may maintain all other policy measures unchanged and will substantially raise its inflation expectations for this year and next year. European Central Bank President Lagarde is expected to emphasize "adherence" to the ECB's easing stance at a press conference after the meeting, and avoid sounding "too tough" because it means tightening monetary policy. Overall, this meeting should support the euro, and the euro against the dollar may rise to 1.20 from the current 1.1844 in the next few months.
Bank of America: The European Central Bank's potential tightening policy signals or boost the euro
The European Central Bank may hint that it plans to end its major asset purchase program early, thereby boosting the euro. Bank of America analysts said that the risk (most likely at the December meeting) is that the European Central Bank signals that it hopes to end the asset purchase plan after exiting the emergency bond purchase plan (PEPP) in March 2022. Ideally, quantitative easing will end before the European Central Bank starts raising interest rates, but recent comments by policymakers suggest that quantitative easing may end sooner. Such forward-looking guidance may lead to a tightening of the financing environment and support the euro.
Commerzbank: GBP/USD may fall to 1.3571
Commerzbank’s technical analysis believes that the pound against the US dollar has fallen below the short-term upward trend line and is on the defensive, and is still facing pressure to fall to 1.3750. Pay attention to the support level near 1.3734/31. If this area is held, the short-term increase will be further. The important mid-term pivot point 1.3984/1.4018 needs to close above 1.4018 to resume the upward momentum. The target is the February high of 1.4280 and the June high of 1.4490. If it falls below 1.3730, the strong support will be located at the July lows of 1.3571 and 55. The weekly moving average is 1.3622, and these levels are expected to act as bottoms.
Westpac: The Australian dollar may fall to 0.7200 against the US dollar
Westpac believes that the Australian dollar against the US dollar may fall sharply to 0.7200/50. The sharp reversal on Tuesday makes it bearish in the short term. The possible source of support is the conversion of historically huge mining dividends into cash. Some people are optimistic that, By October/November, Australia’s catch-up in vaccination should start to loosen restrictions, thereby providing room for economic recovery, but it may encounter setbacks this month and may fall to 0.7200/50. In the near future, it may test a 50-day move. The moving average is 0.7368.
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