Global Market Snapshot 19th August 2024

This week’s foreign exchange market performance was marked by uncertainty and volatility, with various major currencies influenced by multiple factors. Looking ahead, investors need to closely monitor the policy moves of the Federal Reserve and other major central banks, as well as changes in the global economic environment, as these factors will continue to shape the direction of the global foreign exchange market. This week, the US dollar, Japanese yen, British pound, euro, and Canadian dollar have become the focus of the market.

Dragged by downbeat housing data, the U.S. dollar failed to post a sustainable rebound against other major currencies, with the dollar index slipping to 102.44. 

USDJPY slid to 147.15. The Japanese yen has generally shown weakness this week, with changes in the Bank of Japan’s policies and the market’s assessment of economic prospects being the main factors affecting its performance. Despite its weakness this week, the yen is still on track to record its largest weekly decline since June.

GBPUSD rose to 1.2956, U.K. data showed that retail sales grew 0.5% month on month in July (as expected, vs -0.9% in June). The British pound showed strength this week, supported by a slight increase in UK retail sales for July and additional spending during the European Championship, marking its best weekly performance in over a month. Despite ongoing uncertainties like Brexit, the pound’s resilience reflects a positive market response to encouraging economic data, highlighting the underlying vitality of domestic consumption.

EURUSD rose 52 pips to 1.103., the euro reached a yearly high due to the weakening U.S. dollar, but uncertainties surrounding Europe’s growth momentum limited further gains. While European economic data remains stable, concerns about potential growth stagnation have impacted the euro’s performance.

The Canadian dollar saw narrow fluctuations this week, influenced by oil price volatility and weakening trade conditions. While June’s manufacturing sales in Canada declined, July’s new housing starts increased, reflecting the complexity of the domestic economy.