US dollar begins data heavy week by strengthening on robust consumer spending but inflation looks weak
April 29, 2019
The dollar was up last week but took a hit Friday when GDP data showed weak consumer spending. Today’s data for March helped the dollar regain last Friday’s losses as the market prepares to digest a slew of data, including an FOMC meeting and Non-Farm Payrolls. Japan is off until May 6 for Golden Week celebrations.
Economic data and events this week:
April 29, 2019
EUR/USD 1.1153 GBP/USD 1.2910 USD/CAD 1.3470 AUD/USD 0.7046 USD/JPY 111.84 USD/CNH 6.7423 USD/ILS 3.6177 USD/MXN 19.0006 USD/CHF 1.0209 USD/INR 70.0187
The dollar gained on strong personal spending data. Inflation data came in weaker than expected. Personal Consumption Expenditures, the Federal Reserve’s preferred inflation measure, came in at 1.5% (1.6% expected) for March. The Fed's inflation target is 2%, so this data will solidify the Fed's intention to hold rates steady. So far, the Fed has not signaled intentions to cut rates in the near future. The Fed meets Tuesday and Wednesday with an announcement and press conference to follow.GBP
The pound is weaker on general US dollar strength. Brexit discussions continue between the Labor and Conservative parties. This week we have the Bank of England’s super Thursday, where the monetary policy decision, meeting minutes, and inflation report is released. No change is expected in monetary policy.EUR
The euro is flat relative to the US dollar after Italian producer inflation data and consumer confidence numbers came in more or less in-line. In Spain, PM Sanchez has won the election, but once his coalition partner’s seats are included, he is still short of the required number for a clear majority. Talks will now start to form an alliance with other parties, the far right VOX party enters the Spanish parliament, having won a number of seats.CAD
The Canadian dollar is weaker today following oil prices. Since hitting 1.22 in September 2017, the C-dollar has been steadily weakening and will likely test the highs of 1.36 in the coming weeks.ASIA/PACIFIC
Japanese financial markets will be closed until May 6 as Japan celebrates a new emperor to the Chrysanthemum Throne. The yen is softer to start the week.
The Australian dollar is stronger on demand from exporting companies converting back to AUD at month end.
The Chinese yuan was weaker on general US dollar strength. The Chinese currency has been the strongest Asian currency year-to-date, gaining 2% relative to the US dollar.
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