U.S. – Mester: Should We Pay Attention to the Cleveland Fed President’s Remarks?

U.S. – Mester: Should We Pay Attention to the Cleveland Fed President’s Remarks?

31.08.2022

In yesterday's U.S. currency trading, the Canadian dollar was the weakest currency, with the CAD/JPY pair falling by just under 90 pips from 106.684 to 105.778.Market sentiment was dampened by yesterday’s release of Canada’s second-quarter current account balance, which fell to CAD 2.69 billion—roughly half the previous reading. During today’s Asian session, the CAD/JPY pair continues to test lower levels as its upside is capped by the 20-period moving average on the hourly chart; therefore, traders should be cautious of further downside.

Among European currencies, the pound weakened against the U.S. dollar, with GBP/USD falling 130 pips from 1.1760 to 1.1622. GBP/USD has once again hit a new low for the year, and the daily RSI is hovering around 30, leaving little room for further decline. We will need to assess carefully whether the pair will continue to test lower levels during European trading hours.

Today’s schedule includes Germany’s Import Price Index at 3:00 PM, France’s Q2 GDP, Producer Price Index, and Consumer Price Index at 3:45 PM, Turkey’s Q2 GDP at 4:00 PM, Germany’s Unemployment Rate at 4:55 PM, the Eurozone’s Consumer Price Index at 6:00 PM, and South Africa’s Trade Balance at 8:00 PM,a speech by U.S. Federal Reserve Bank of Cleveland President Mester, U.S. ADP Employment Report at 9:15 PM, Canadian GDP at 9:30 PM, U.S. Chicago PMI at 10:45 PM, and U.S. weekly crude oil inventories at 11:30 PM. We will monitor currency strength and weakness while paying close attention to key speeches during U.S. trading hours.