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Dollar domination was in play for the most part of the session, but the Loonie overtook its North American rival in the race to the top. The mood in Wall Street was generally positive, allowing equity indices to close in the green.

  • U.S. NFIB Small Business index up from 107.2 to 107.9 vs. 106.9 forecast
  • U.S. import prices flat in July vs. estimated 0.1% uptick
  • Market concerns about Turkey easing?

Major Events/Reports:

A bit of risk appetite

Although the latest headlines suggest that the situation in Turkey is still pretty tense and that the U.S. has no plans of lifting its sanctions anytime soon, markets appear to be less anxious about potential contagion.

U.S. equity indices snapped their losing streak and squeezed out some green:

  • Dow 30 index is up 112.22 points to 25,299.92 (+0.45%)
  • Nasdaq is up 51.19 points to 7,870.89 (+0.65%)
  • S&P 500 index is up 18.03 points to 2,839.96 (+0.64%)

A recovery in emerging market currencies, including the Turkish lira, likely spurred the pickup in risk-taking as financial shares led the rebound.

Turkey’s finance minister Berat Albayrak had a few words of reassurance on their financial sector, adding that they will take measures to reduce exchange rate risks. He said:

“We will protect the lira, we will march with the lira and the lira will strengthen greatly in the coming period.”

Major Market Mover(s):

USD

The dollar stayed strongly supported throughout the session even as safe-haven demand eased.

USD/JPY advanced from 110.86 to a high of 111.32, GBP/USD fell from 1.2772 to a low of 1.2704, USD/CHF is up to a high of .9951, and AUD/USD is down to a low of .7223.

CAD

The only currency that was able to escape dollar strength was the Loonie. This was a bit of a surprise since crude oil closed lower and there were no Canadian reports released.

USD/CAD sank from a high of 1.3121 to a low of 1.3056, CAD/JPY is up from 84.57 to a high of 85.24, EUR/CAD fell to 1.4817, and AUD/CAD is down to .9450.

EUR

On the flip side, the shared currency stayed behind the pack for the rest of the session. After all, the euro zone would likely be the first to get burnt once Turkey is toast.

EUR/USD kept sliding to a low of 1.1347, EUR/JPY tumbled from 126.55 to 125.81, EUR/GBP retested support near .8900, and EUR/CHF dropped to a fresh low of 1.1266.

Watch Out For:

  • 12:30 am GMT: Australia Westpac consumer sentiment (3.9% previous)
  • 1:30 am GMT: Australia’s wage price index q/q (gain from 0.5% to 0.6% expected)