Dollar continues to strengthen; Brexit date likely to be extended
Laurence Hayward | April 8, 2019
The dollar is holding onto last week’s gain against the yen and is holding steady in a range against the euro. The Brexit saga continues and the pound remains in its slow strengthening trend.
Monday: February Factory Orders, Durable Goods Orders and Capital Goods Orders
Tuesday: March NFIB Small Business Optimism
Wednesday: March CPI, Real Hourly and Weekly Earnings data
Thursday: March PPI, Initial Weekly Jobless Claims
Friday: Import and Export Index data, University of Michigan Consumer Sentiment, Current Conditions and Expectations
April 8, 2019
EUR/USD 1.1269 GBP/USD 1.3040 USD/CAD 1.3347 AUD/USD 0.7123 USD/JPY 111.32 USD/CNH 6.7163 USD/ILS 3.5824 USD/MXN 18.9729 USD/CHF 0.9981 USD/INR 69.6738
The dollar is generally slightly stronger. The US-China trade talks continue on a positive note as Larry Kudlow, economic advisor to Trump, said the negotiations are getting “closer and closer”. The talks are scheduled to continue this week.GBP
PM Theresa May said her Brexit deal is unlikely to pass in the near future. Last week, she tried to get support across party lines. May would like another extension to the end of June. Her hope is that a deal can be agreed upon in Parliament. This would avoid the European Parliamentary elections which take place on May 23rd. The EU would like a longer extension with some flexibility built in. Liz Truss, the Conservative Chief Secretary, said if they do this it would be “like Purgatory”.
On Friday the pound broke the 1.3000 level and then recovered as the markets tried to factor in the latest Brexit news.EUR
Italian debt is in the news again as Italy considers using 2 billion euros from a contingency fund to meet their structural deficit target. Italian growth looks to be slowing and revenue is dropping. Rome is expected to amend its 2020 deficit to 2.1% of GDP when it publishes its new targets on Wednesday.
The European Central Bank has its next policy meeting on Wednesday.CAD
The Canadian Dollar strengthened as Housing Starts rose in March. Oil is also helping the loonie as it slowly rises.ASIA/PACIFIC
Far East stock markets had no particular direction to start the week, but there was a risk off bias. Japanese stocks weakened as the yen strengthened. The Chinese-US trade talks are said to be making some progress.
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