From Marc Chandler at Bannockburn Global Forex:
The US dollar continues to trade heavily after the series of softer than expected data since the loss of US jobs in July. The stabilization of price pressures and the decline in retail sales have seen the market downgrade the chances of a rate hike next month. At the end of July, the market was discounted a little more than a 70% chance of a hike and now it is about 30%. In the current environment, changes in the short-term US rates appear to be the key to the greenback’s broad performance. Yet, we note that technically, the dollar’s momentum indicators are oversold. Perhaps the price action is setting up for a “turn-around Tuesday”.
Japan and China reported disappointing data. Japanese private consumption was flat in Q2 and capex fell by 1.2% (-1.0% in Q1 26). The build of inventories and exports appeared to account for the growth in the world’s third largest economy. China’s July macro data were weaker than expected following the disappointing Q2 growth. Meanwhile, Canadian negotiators have about 36 hours to strike a deal with the US to avoid a 50% tariff on around $20 bln of goods shipped to the US....
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