Forex Today: Majors stay quiet as investors await US' 'economic D-Day' sanctions
Here is what you need to know on Monday, August 24:
Financial markets stay relatively quiet to start the new week as investors refrain from taking large positions ahead of this week's key events. The economic calendar will not feature any high-impact macroeconomic data releases on Monday. Later in the day, US Treasury Secretary Scott Bessent is due to hold a press conference at 18:00 GMT to unveil 'economic D-Day' sanctions on Iran. Bessent explained that the US aims to “sever every economic lifeline” that sustains Iran.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.06% | 0.10% | 0.51% | 0.08% | 0.11% | 0.09% | |
| EUR | -0.10% | -0.01% | 0.06% | 0.42% | 0.02% | 0.10% | -0.00% | |
| GBP | -0.06% | 0.01% | 0.07% | 0.43% | 0.02% | 0.11% | 0.02% | |
| JPY | -0.10% | -0.06% | -0.07% | 0.44% | -0.11% | -0.00% | -0.05% | |
| CAD | -0.51% | -0.42% | -0.43% | -0.44% | -0.51% | -0.33% | -0.42% | |
| AUD | -0.08% | -0.02% | -0.02% | 0.11% | 0.51% | 0.09% | 0.02% | |
| NZD | -0.11% | -0.10% | -0.11% | 0.00% | 0.33% | -0.09% | -0.08% | |
| CHF | -0.09% | 0.00% | -0.02% | 0.05% | 0.42% | -0.02% | 0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Dollar (USD) Index benefits from the cautious market stance and edges higher to the 99.00 region after closing the previous week deep in negative territory. In the meantime, US stock index futures trade marginally lower in the European morning. On Wednesday, the US Bureau of Economic Analysis (BEA) will publish the second estimate of the quarterly Gross Domestic Product (GDP) growth data and the Personal Consumption Expenditures (PCE) Price Index figures for July. More importantly, investors will scrutinize comments from Federal Reserve (Fed) Chair Kevin Warsh at the annual Jackson Hole Symposium.
Dollar focus turns to US core PCE and Fed messaging from Jackson Hole
Analysts at ING highlight that, beyond the immediate policy signals from the White House, two events stand out on this week’s US calendar: “Wednesday's release of US core PCE inflation for July and Friday afternoon's keynote speech from Kevin Warsh at the Jackson Hole symposium.” They caution that, “while he is unlikely to shed much/any light on what the Fed will do with monetary policy next month, he will have to double-down on the Fed's inflation-fighting credentials” – a necessity, they argue, given that “his July press conference triggered a sell-off at the long-end of the Treasury market.”
US President Donald Trump ordered 50% levies on around 5% of Canada's exports to the US after negotiations failed late last week. Canadian Prime Minister Mark Carney said on Saturday that Canada will impose tariffs on some US goods in retaliation. "Canada will match Washington's new tariffs Dollar for Dollar in order to protect Canadian workers, farmers, families, and businesses," Carney told a press conference. USD/CAD continues to push higher after opening with a bullish gap and was last seen rising about 0.5% on the day at 1.3835.
RBC sees limited macro fallout from new US tariffs, keeps focus on fiscal support over BoC rate cuts
Analysts at Royal Bank of Canada argue that the latest Section 338 US tariffs, while disruptive for specific export sectors, are unlikely to materially alter the monetary policy outlook. RBC writes that it does "not expect the broader macroeconomic impact of these new tariffs to be enough to push the Bank of Canada (BoC) to seriously consider pivoting to interest rate cuts." Instead, the bank stresses that "tariff economic growth headwinds are still relatively narrowly based in a smaller number of highly impacted industries" and that "fiscal (government tax and spending) policy is still better suited to provide targeted relief than blanket changes in interest rates from the central bank – and there are reports that fiscal supports will follow the imposition of this latest tariff round." Together, these factors underpin RBC’s view that targeted government measures, rather than a shift in BoC policy, remain the more appropriate response to the new trade actions.
EUR/USD inches higher in the European morning on Monday and trades below 1.1700.
GBP/USD stays in a consolidation phase slightly below 1.3650 early Monday after reaching its highest level since February on Friday.
USD/JPY fluctuates in a narrow range and holds slightly above 159.00 following the previous week's choppy action.
Gold preserves its bullish momentum and trades at its highest level in three months near $4,650 after rising more than 5% in the previous week.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.