FX Update: Broad Dollar Correction
FX Action: The USD has continued its correction in European trade, with stop related buying in AUD-USD and NZD-USD notable. Front-month NYMEX crude prices have continued higher today, now comfortable registering over a 1% gain on the day and back above the $115 handle. Tropical storm disruptions in the Gulf of Mexico was the prompt for higher oil and the broader dollar correction today. The AUD found a added boost from BHP Billiton, which stated that it saw demand remaining robust.
Overall, the move so far today is not of a trend-changing kind: the growth slowdown in major economies should keep a lid on the commodity price upside and rate differentials are likely to remain in favour of the USD, although the Fed is in no hurry to hikes.