The dollar held onto gains after meeting PPI estimates; Chinese policy and currency fixing keeps the yuan stable despite recent fluctuations
Kathryn Garvey | June 11, 2019
US PPI data met expectations this morning, allowing the US dollar to hold onto gains. Dollar strength keeps the euro tracking sideways. Strong data out of the UK lifted the pound, but ever present Brexit uncertainty caps the currency’s strength. Yuan fixing and policy announcements out of China solidify China’s intent to keep the yuan stable amid questions if a devalued yuan could boost Chinese economy.
“Instead of worrying about what you cannot control, shift your energy to what you can create.”Roy T. Bennett
June 11, 2019
EUR/USD 1.1315 GBP/USD 1.2707 USD/CAD 1.3262 AUD/USD 0.6960 USD/JPY 108.67 USD/CNH 6.9235 USD/ILS 3.5800 USD/MXN 19.1431 USD/CHF 0.9930 USD/INR 69.4538
USDThe dollar maintained gains after US May producer prices (PPI) met expectations. US PPI rose 0.1% MoM and 1.8% YoY vs expectations of 0.1% MoM and 1.9%YoY. PPI Core rose 0.2% MoM and 2.3% YoY hitting expectations exactly. The latest trade war comments from the White House assure that if Chinese President Xi Jinping doesn’t attend the G-20 meeting later this month, additional duties will be levied on Chinese goods. Trump told CNBC “The China deal is going to work out. You know why? Because of tariffs”.GBPThe pound was initially helped this morning by UK employment data that showed an uptick to 3.1% for wage growth and ex-bonus measure of 3.4% for the first 3 months of the year. Data, paired with hawkish comments from BoE, pushed the pound higher. Brexit uncertainty and dollar strength keep the gains capped.EUR
Disciplinary procedures over Italy’s too high debt levels begin today. Deputy PM Matteo Salvini insisted that he doesn’t want to “pick up a fight with Europe” and that a compromise can be found. EU reps are to meet with finance minister Giovanni Tria to set up an acceptable shared budget package. The euro is slightly weaker following strong US data, but mostly tracking sideways within range.CADThe loonie was helped by slightly higher oil prices but maintains directionless within a range. US CPI numbers tomorrow may provide direction.ASIA/PACIFIC
In a clear message around China's intent to keep the yuan stable, the central bank fixed the yuan more than expected on Tuesday and announced plans to sell bills in Hong Kong at the end of the month. Beijing announced another stimulus program to provide more spending for infrastructure and public projects.
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