The Morning Update

The USD opens higher this morning as well as equities an doil prices while treasury yields soften. After much hype, the Fed as expected kept the interest rates stable and Powell’s statement confirmed the strong possibility for the first cut in September while the chances are high for one otherin 2024. Perhaps tomorrow's Employment figure will offer a clue.

In other news. Iranians turned out to mourn Hamas political leader Haniyeh who was assassinated in Teheran a few days ago. Iran and Palestinian Islamist militant have accused Israel ofcarrying the strike. Israel has not claimed responsibility for this. It would be difficult for a cease fire negotiation to resume after Hamas’ negotiator was assassinated. A senior North Korean diplomat that recently defected claims that North Korea wants to restart nuclear talks if Trump wins.

In currency news. China's yuan weakened slightly against the U.S. dollar today, after surging in the previous session in line with Japanese yen, as data showed the country's economy was stillstruggling to stabilise. The Australian and New Zealand dollars steadied above recent lows on Thursday as a sharp fall in U.S. yields sparked a round of short-covering in the beaten-down currencies, while bonds extended gains on hopes of early rate cuts. South Africa's rand was steady early on Thursday,ahead of a purchasing managers' index (PMI) survey for the local manufacturingsector. Malaysian ringgit hits one-year high with investors cheering a possibleend to the U.S. Federal Reserve's restrictive policy settings in September. As we start the day the USD is mixed. It rose against the CNY 0.33%, THB 0.23% while loosing ground against the MYR (-054%). The AUD and NZD are both trading lower against the USD -0.23% and 0.15% respectively. The USD has strengthened against the ZAR 0.11% and MXN 0.45%.

In commodity markets. Oil prices continue its march higher with 0.77% gain. Gold reached a 2-week high as Fed opened the door for a September rate cut while Silver sold off 0.4%. Copper remains under pressure as concerns over China’s demand – the world largest customer. China’s demand worries are not only affecting Copper but also soybean (-0.24%). Wheat rose0.24%.

Current level USD Index               104.367           Up 0.16%

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The USD/CAD attracted some buyers after touching 1.3785yesterday.

Current level USD/CAD               1.38330            Flat

The EUR/CAD lost some ground yesterday after spending the betterpart of week near/at its 8 month peak.

Current level EUR/CAD                1.4909           Down 0.25%

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The EUR/USD continued move lower is attributed to the improved USD due to a recovery in US Treasury yields ahead ofUS key economic data including ISM Manufacturing PMI and weekly Initial Jobless Claims.

Current levelEUR/USD                1.0779           Down 0.42%

The GBP/EUR sold off as the Eurozone inflationdata raises doubt of an ECB cut I September while the BoE is set to announce theirinterest decision latre today.

Current level GBP/EUR     1.1842(0.8441)        Down 0.25%

The GBP/USD awaits the BoE’s interest rate decision later today.

Current levelGBP/USD                1.277           Down 0.61%

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