Optimism around the reopening economy sends dollar lower and stocks higher
The reopening of the global economy led to optimism as the trading week begins in the US. The dollar fell to its lowest point since mid-March or about the time lockdown became national. Financial markets seemed to ignore saber-rattling between the US and China over the weekend. The British pound strengthened despite negative sentiment around the upcoming UK/EU trade talks.
Economic Data for this Week:
Wednesday: US Federal Reserve Beige Book
Thursday: GDP Q1 second reading (4.8%) and Durable Goods for April
Friday: PCE inflation data and Personal Spending for April
May 26, 2020
EUR/USD 1.0989 GBP/USD 1.2358 USD/CAD 1.3798 AUD/USD 0.6659 USD/JPY 107.61 USD/CNH 7.1409 USD/ILS 3.5082 USD/MXN 22.2223 USD/CHF 0.9673 USD/INR 75.6650
The dollar weakened on optimism for the global economy despite much better than expected new home sales in the month of April. The dollar is now at its lowest point since March 16 vs. a basket of currencies and has now given back much of the gains enjoyed as the global lockdown was being implemented.GBP
The pound rallied versus the dollar despite uncertainty around the June 1 kick-off of trade talks between the UK and the European Union. Also, Prime Minister Boris Johnson's government sustained a scandal over the weekend as his lead advisor, Dominic Cummings, ignored lockdown requirements to travel across the country.EURThe euro strengthened on overall dollar weakness. The common currency has often stalled when rallying to the 1.0980 level. If the euro punches through the 1.10 level, it could reach for new highs.CAD
The Canadian dollar touches 2-month highs as global economies reopen amidst coronavirus vaccine optimism. BoC Governor Poloz will speak to a Senate committee this afternoon as traders will look for any helpful commentary before Friday’s GDP print.ASIA/PACIFICYesterday’s PBOC currency fix against the USD was the weakest since 2008. This move stems from deepening US/China trade tensions and exacerbated relations with Hong Kong.
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