USD IS NOT RALLYING ON GOVERNMENT SHUTDOWN
* USD is mixed as US government shutdowns & debt ceiling looms.
* USD—shutdown is USD neg for growth & Fed expectations; but positive from risk perspective. Nonfarm payroll release thrown into question.
* CAD flat facing neg GDP consequence of US gov’t shutdown; Macklem today at 11:55am EST.
* EUR up to 7-mth high even on soft German empl, US gov’t, Weidmann warns on sovereign risk, Italian political uncertainty & Wed’s ECB risk.
* CHF rallies to fresh 19-month high on US gov’t & strong PMI manu.
* GBP rallies to 10‐mth high on flows. PMI manu 56.7 – below expectation.
* JPY rallies on risk, strong Tankan & Abe’s consumption tax increase.
* AUD rallies as RBA maintains neutral stance & fails to warn on recent FX appreciation.
* CNY—manu PMI rises to 51.1—China on holiday rest of week.
* FX reserves: Q2 buying of AUD, CAD & EUR; selling of USD, GBP & JPY.
Read full report: FX Daily
Scotiabank