Dollar higher amid solid US data and earnings

The dollar gained overnight on the back of this week’s solid US economic data and healthy corporate earnings. Coupled with positive economic news out of China, a risk-on mood sent equity markets higher worldwide. Traders look forward to next week’s World Economic Forum Annual Meeting in Davos, Switzerland, where many of the world’s movers and shakers meet and share views.

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  • FX Rates
    January 17, 2020

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  • USD

    The dollar moved broadly higher within a risk-on mood fueled by solid economic data, strong corporate earnings – particularly US investment banks – and good economic news out of China.  


    The pound softened following weaker-than-expected UK Retail Sales data. It remains, however, within a $1.30-$1.31 range. Traders are increasingly expecting (odds are now at 75%) a rate cut by the Bank of England on January 30. Option trading showed a bullish slant to GBP/USD for the first time in two months.


    The euro is lower in light trading and no economic data releases that were market movers. Traders look forward to next week’s ECB meeting. Recently, it has been the EUR/GBP that has dominated trading activity and has had a greater impact on the value of the EUR than trading in the EUR/USD.


    The loonie moved lower in-line with broad US dollar strength. Traders are focusing on next week’s Bank of Canada meeting, when officials are expected to keep rates unchanged. Day-to-day ‘volatility’ in USD/CAD trading is approaching a record low.


    The Chinese yuan continued to rally versus the USD, dropping near 6.85 for the first time since July 2019. China’s Industrial Production in December soared to 6.9%, higher than survey of 5.9% and the prior month’s 6.2%.

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Scott Petruska, CFA
Scott Petruska, CFA

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