The US dollar remains under pressure against most major currencies, although it has erased some losses after hitting session lows overnight.  Data from the Commerce Department showed the US trade gap expanded 16.3% in July to $32.0 billion, the biggest month-to-month increase since February 1999.  Imports leapt a record 4.7% on renewed appetite for foreign items.  The Labor Department also released data showing US workers filing new claims for jobless benefits fell last week to 550,000. 

Overnight, the euro hit a fresh high above $1.46 after US jobless claims numbers dropped.  However, the euro erased most of its gains as world stocks eased from 11 month highs and Wall Street opens negative.  

The British pound hit a one-month high vs. the dollar after the Bank of England kept interest rates unchanged.  The BoE held its benchmark lending rate at a record low of 0.5%, reassuring those who had been bracing for the possibility of additional quantitative easing measures.  Although the BoE will keep their 175 billion pound asset-buying program in place, some analysts are expecting the central bank to increase its asset-buying plan later in the year to help boost the UK economy. 

The Japanese yen continues to strengthen against the dollar as risk appetite increases amongst investors.  On the data front, Japan's core machinery orders, which many utilize to gauge capital spending, fell 9.3% in July. 

The Canadian dollar retreated against the US dollar as world stocks fell and markets awaited the Bank of Canada's rate announcement.  The BoC held rates at 0.25% which was widely expected, and announced that they expected Canada's economy to rebound more sharply than anticipated in the second half of this year.      

The Australian and New Zealand dollars weakened against the US dollar as commodity prices weakened.  Although oil prices held steady around $72 a barrel, gold prices fell as risk-averse investors sold off their riskier assets.

Indicative rates:

EUR/USD

1.4573

USD/JPY

91.34

GBP/USD

1.6678

USD/CAD

1.0820

USD/MXN

13.5070

USD/CHF

1.0400

AUD/USD

0.8600

NZD/USD

0.7002

USD/DKK

5.1186

USD/SEK

7.0330

USD/NOK

5.9486

USD/TWD

32.600

USD/CNY

6.8263

10-Year Treasury Note Yield:  3.404%

Dow Jones Industrial Average:  9,535.51 - 12.32

This market summary is prepared by Union Bank's Global FX Department for the general information of its customers. It is based on the most accurate information currently available, but should not be considered investment advice or a guarantee of future exchange rates or trends.