The US dollar had a mixed performance, although it was mostly stronger across the board when risk aversion picked up. Data from the US economy was also mostly stronger than expected, with the exception of pending home sales for August. The final GDP reading was upgraded from 1.1% to 1.4% while initial jobless claims showed a smaller than expected tally. For today, personal spending and income numbers are due, along with the core PCE price index. The Chicago PMI and revised consumer sentiment data from the UoM are also lined up.


The euro suffered a brief selloff when news of Deutsche Bank clients withdrawing funds hit the newswires. Still, the shared currency managed to take a piece out of the safe-haven flows in the region as equities tanked. Data from the region was mostly stronger than expected, with German and Spanish flash CPI readings beating expectations and Germany’s unemployment change report printing a surprise 1K rise in joblessness instead of the estimated 5K drop. German retail sales and French preliminary CPI numbers are lined up today but the Deutsche Bank story could prove to be a bigger mover.


The pound trailed the euro in sliding against its peers in the wake of the Deutsche Bank news, as banking troubles in Europe could take a huge hit on London’s financial sector. UK net lending to individuals was stronger than expected at $4.5 billion GBP. UK final GDP and current account balance numbers are due today.


The franc was the big winner for the day as the Swiss currency was the safe-haven of choice in Europe. There were no reports out of the Swiss economy yesterday while today has the KOF economic barometer due and a rise from 99.8 to 100.5 is eyed. More updates on the Deutsche Bank story could impact the franc, although profit-taking could also be in the cards at the end of the month and quarter.


The yen was also the beneficiary of safe-haven flows but it caved to franc strength. Earlier today, Japan printed weaker than expected readings for inflation and consumer spending. Household spending slipped 4.6% versus the estimated 2.1% drop while the Tokyo and national core CPI posted 0.5% declines versus the projected drops of 0.4%. The unemployment rate ticked higher but preliminary industrial production beat expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took a huge hit from the run in risk aversion, even giving up ground to the euro and the pound as traders sought lower-yielding currencies. There were no major reports out of the comdoll economies yesterday and the Loonie seems to have let go of its post-OPEC gains. China’s Caixin flash manufacturing PMI is lined up ahead of Canada’s monthly GDP reading. Chinese official PMI readings are due over the weekend.

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