Dollar on soft footing as Fed outlook clouds market speculation
June 24, 2019
The Bloomberg Dollar Index trails off for its fifth straight day of losses following last week’s dovish Fed guidance. Euro strength touches three-month highs despite weaker than expected business confidence survey results. Pending US sanctions on Iran and uncertainty around enhancements to US-China trade relations look to be curbing global optimism.
Tuesday: US Consumer Confidence
Wednesday: US Durable Goods, Germany Consumer Sentiment
Thursday: Japan Retail Sales, Germany CPI, US Q1 GDP final
Friday: UK Consumer Confidence, Canada GDP, US Personal Spending
June 24, 2019
EUR/USD 1.1381 GBP/USD 1.2717 USD/CAD 1.3211 AUD/USD 0.6953 USD/JPY 107.5 USD/CNH 6.8774 USD/ILS 3.6070 USD/MXN 19.1519 USD/CHF 0.9753 USD/INR 69.3550
The greenback begins this week lower after a weaker outlook from US Fed officials trims long dollar positions. A lift to USD price action could be seen after Trump meets China’s Xi Jinping at the highly anticipated G-20 summit in Japan this week. Traders will focus attention on Fed Chair Jerome Powell’s speech on the economic outlook Tuesday.GBPSterling declines against the dollar and continues its downward trend since May 3. Markets grow wary of likely PM Boris Johnson’s no deal-if necessary Brexit view. UK pessimism remains after the BoE cut its Q2 GDP growth estimate last week.EURThe euro outperforms the dollar this morning and builds on top of last week’s gains. Despite ECB dovishness and weak German business sentiment data released this morning, the common currency is finding solid support from a soft US Fed position.CAD
The loonie rises along with most commodity currencies as oil prices advance on US-Iran trade tensions. The currency is taking full advantage of a dovish US Central Bank stance and touched three-month lows this past Friday.ASIA/PACIFIC
The Japanese yen holds its strengthening pattern since late April as markets take precautionary measures with US-China trade outcomes pending at the G20 summit in Osaka.
The Australian dollar is the biggest mover amongst G-10 currencies as central bank Governor Lowe questioned the effectiveness of further monetary easing.
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