RISK AVERSION SPIKES DRIVING A STRONG USD
* USD is strong as the weight of a weak nonfarm is surpassed by rising risk aversion on concerns in China’s mmkt; profit taking takes hold.
* USD ‐ drivers shifted negative in the summer & have supported EUR.
* CAD is weak on risk aversion, leading into the BoC decision.
* EUR is off its two‐year high on broad USD move & rising risk of ECB verbal response to EUR. ECB releases details of banking sector review.
* GBP is weak on broad USD; no surprise in less dovish BoE minutes.
* NOK & SEK are both weak, leading into central bank decisions (Thurs).
* JPY is strong on risk aversion and reports of insurer investing in JGB.
* AUD is soft, initially rallying on strong CPI, but then falling victim to risk.
* CNY trades to fresh record high; mmkt suggest liquidity risk is rising and PBoC fails to inject cash. HSBC flash PMI today at 9:45pm EST.
Read full report: FX Daily
Scotiabank